TWENTIETH CENTURY SOCIALISM 



TWENTIETH CENTURY 
SOCIALISM 



WHAT IT IS NOT; WHAT IT IS; 
HOW IT MAY COME 



BY 

EDMOND KELLY, M.A., F.G.S. 

Late Lecturer on Municipal Government at Columbia University, 
in the City of New York 

Author of "Government or Human Evolution," etc., ete. 



LONGMANS, GREEN, AND CO 

FOURTH AVENUE & 30TH STREET, NEW YORK 

LONDON, BOMBAY, AND CALCUTTA 

1910 









Copyright, 1910 

BY 

LONGMANS, GREEN, AND CO. 



THE SCIENTIFIC PRESS 

ROBERT DRUMMOND AND COMPANY 

NEW YORK 



©GI.A265402 



INTRODUCTION 



No one whose intellectual parts are in working order 
believes that the industrial world will go back to an 
unorganized individualistic production and distribution 
of wealth. No one whose moral sense is awake desires 
to see the chief means of production owned and con- 
trolled by a small number of monstrously wealthy men, 
however great their ability or good their intentions. 
Nevertheless, most persons of moral sense and normal 
mentality are disturbed when one suggests in so many 
words that if industry cannot henceforth be individual- 
istic and should not be owned and controlled by the 
Big Few, it will, apparently, have to be owned and con- 
trolled by the Many. This paradoxical psychology 
possibly indicates that we queer human beings do our 
real thinking and perform our occasional feats of moral 
self-examination in lucid intervals, alternating with 
states of mind — and conscience — which were better not 
described in non-technical language. 

Edmond Kelly was a man whose lucidity was not 
interrupted. It was a necessity of his nature to think 
clearly and coherently. Not less necessary was it for 
him to think comprehensively, for his sympathy was 



vi INTRODUCTION 

boundless. Every phase of life interested him. He 
found nothing but meanness contemptible; and nothing 
but injustice moved him to hate. To such a mind the 
partial view is intolerable. A fact must be seen from 
every side and its relations to other facts must be traced 
out. From his earliest manhood Mr. Kelly looked 
upon the struggle for existence as both evolution and 
effort. Accepting the Darwinian explanation of life, 
he yet could not admit that man is powerless to control 
his fate. Physical evolution shades into physiological, 
and physiological evolution into psychological. Effort, 
foresight, and directed effort are products of evolution, 
but having been produced, they become forces in further 
evolution. In the higher evolution of man, they have 
become principal forces. From the moment that Mr. 
Kelly grasped this thought his mind was busy with it 
through all the years of his exceedingly active life, mas- 
tering its implications, examining it in its social or col- 
lective, no less than in its individual aspect, and fore- 
casting the chief lines of constructive effort by an 
enlightened mankind industrially and politically organ- 
ized for the most effective cooperation. 

Yet it was not until a few years before his death that 
Mr. Kelly became a declared Socialist. The slow advance 
to his ultimate conclusions was characteristic. Though 
his mind moved swiftly, his intellectual integrity com- 
pelled him to examine every position as he went on. 
Because of these qualities his books form a series, con- 
secutive in premisses and argument; a logical sequence 
corresponding to their chronological order. Thus, in 
his early work, " Evolution and Effort," Mr. Kelly was 
content to do thoroughly one particular thing, namely, 
to demonstrate that the Spencerian philosophy of evolu- 
tion could be accepted without committing mankind to 



INTRODUCTION vii 

the practical programme of laissez faire, upon which Mr. 
Spencer himself so strongly insisted. This work Mr. 
Kelly did so well that there is no need for anyone to do 
it over, and it provided a firm foundation for his further 
constructive efforts. The Popular Science Monthly, 
which was then, under the editorship of Professor 
Edward L. Youmans, unreservedly committed to Spencer- 
ian views, acknowledged that it was the most telling 
attack upon what Professor Huxley had called "admin- 
istrative nihilism" that had been made in any quarter. 
The main ideas of " Evolution and Effort" were elaborated 
and clinched in the two large volumes on " Government 
or Human Evolution," and were concretely applied to 
pressing practical questions in the unsigned book, "A 
Programme for Workingmen." 

Each of the two volumes on "Government" was 
devoted, as " Evolution and Effort" had been, to establish- 
ing firmly a specific proposition. When Mr. Kelly began 
writing the first volume, which bore the sub-title "Jus- 
tice," he was a lecturer in the Faculty of Political Science 
at Columbia University and was intensely interested 
in the movement for the reform of municipal politics 
in New York city. Believing that adequate organization 
was the chief need, he had founded the City Club and 
the subsidiary Good Government Clubs. In the dis- 
cussions which this movement called forth, he says: 
"One fact stood out with startling conspicuousness. 
Not one out of a thousand was able to formulate a clear 
idea as to the principles upon which he stood; upon one 
measure he was an Individualist; upon another, a Col- 
lectivism one day he was for strong governmental action; 
the next for liberty of contract; and of those who pre- 
sented the claims of expediency and justice respectively , 
no one was able to say what justice was." 



viii INTRODUCTION 

It seemed, therefore, to Mr. Kelly that on the theoret- 
ical side we needed firsthand above all else, a clear con- 
ception of justice as an end to be attained. For con- 
clusions already arrived at in "Evolution and Effort" 
made it impossible for himto believe that justice is satisfied 
by merely "rewarding every man according to his per- 
formance." Seeing in evolution possibilities beyond 
present attainment, he believed that a way should be 
found to enable every man to achieve his potential 
performance. Thus his notion of justice, derived from 
the principle of evolution, became substantially identical 
with that which had been set forth two thousand years 
ago by Plato in The Republic. To quote Mr. Kelly's 
own words: "Justice may, then, be described as the 
effort to eliminate from our social conditions the effects 
of the inequalities of Nature upon the happiness and 
advancement of man, and particularly to create an 
artificial environment which shall serve the individual 
as well as the race, and tend to perpetuate noble types 
rather than those which are base." 

It was inevitable that with such a conception of justice 
in mind, a thinker scientifically so remorseless as Mr. 
Kelly was, should find individualistic prejudices shaken 
before he completed his task. " Beginning w T ith a strong 
bias against Socialism of every kind," he was forced before 
he reached the end of his first volume to "a reluctant 
recognition that by collective action only could the uncor- 
rupted many be rescued from the corrupt few, and could 
successful effort be made to diminish the misery of 
poverty and crime." 

Having arrived at this conclusion, Mr. Kelly was able 
to make his second volume on the respective claims of 
Individualism and Collectivism an exposition which, 
for clearness of insight, acuteness of philosophical 



INTRODUCTION ix 

observation, wealth of historical knowledge, and sanity 
of judgment, has few equals in the modern literature 
of social problems. He demonstrated the inevitable fail- 
ure of individualism as an adequate working programme 
for a complex civilization. He showed that collectivism 
must be accepted, whether we like it or not, if we desire 
justice; and, more than this, he showed, not speculatively, 
but from concrete and experimental data, that a civilized 
mankind may be expected to like a reasonable collectivism 
when it begins to understand and to adopt it, far better 
than it has liked individualism, and for the adequate 
reason that collectivism will diminish misery and in- 
crease happiness. 

Not even upon the completion of this remarkable 
volume, however, was Mr. Kelly quite ready to take the 
final step of identifying himself with the Socialist party. 
So strong was that nature within him which, without 
theological implications, we may call the spiritual or 
religious, that he would have been glad if he could have 
seen the possibility of attaining the ends which Socialism 
contemplates through a movement essentially subjective, 
that is to say, through developments of the intellectual 
and moral nature of man which would impel all human 
beings, irrespective of class distinctions, to work together 
spontaneously and unselfishly, for the creation of a 
wholesome environment and essential justice in social 
relations. It was this feeling that led him to write 
the anonymously published, "Practical Programme for 
Workingmen," in which essentially socialistic measures 
are advocated, but with strong emphasis upon the vital 
importance of character and sympathy. 

When a strong-minded man of strict intellectual 
honesty has thus advanced, step by step, from one 
position to another, at every stage of his progress survey- 



x INTRODUCTION 

ing the whole field of human struggle; observing it 
dispassionately, as a scientific evolutionist; observing 
it sympathetically, "as one who loves his fellowmen," 
comes at last to the socialistic conclusion, and devotes 
the last weeks of his life to the preparation of a new 
statement of socialistic doctrine, the fact is more signif- 
icant, as an indication of the way mankind is going, than 
are all the cries of "lo here, lo there' ' that arise from the 
din of party discussion. In Mr. Kelly's case the signif- 
icance was deepened by all the circumstances of taste 
and association. Intensely democratic in his relations 
to men, Mr. Kelly was in breeding, in culture, in delicacy 
of feeling an aristocrat of the purest type. Educated at 
Columbia and at Cambridge, his university acquaintance 
and his political and professional activities in New York 
and in Paris had kept him continually in touch with 
what the socialist calls "the capitalist class." In joining 
the Socialist party he jeopardized friendships and asso- 
ciations that meant more to him than anything else save 
the approval of his own conscience. 

The book now given to the public, written when he 
knew that his days were numbered, is, all in all, the most 
remarkable of his works. All writers of experience 
know that it is far easier to write a first statement of a 
newly discovered truth, than to restate the chief prin- 
ciples of a system already partly formulated; a system 
more or less vague where it is most vital, more or less 
unscientific and impossible where it is most specific. 
No one knew better than Mr. Kelly did that while the 
larger-minded leaders of the Socialist movement would 
generously welcome any thought which he had to give, 
there would be some of the rank and file who would feel 
that, in differing from the accredited writers, he was 
revealing himself as a convert not yet quite informed 



INTRODUCTION xi 

on all tenets of the creed — perhaps not even quite sound 
in the faith. A less enthusiastic nature, or one less 
resolutely determined to complete his life work as best 
he could, would have shrunk from such an undertaking 
as this book was. That under the circumstances he 
could put into it the vigor of thought and of style, the 
incisive criticism, the wealth of fact and illustration; 
above all, the freshness of view, the practical good sense 
and the strong constructive treatment which we find in 
these pages, is indeed remarkable. 

How clearly he saw what sort of a book was needed, 
is best indicated in his own account of what he desired 
to do. It should be first of all, he thought, comprehensive. 
Socialism has been presented from the economic stand- 
point, from the scientific, from the ethical and from the 
idealistic. As Mr. Kelly saw it, Socialism is not merely 
an economic system, nor merely an idealistic vision. 
It is a consequence and product of evolution. "Science 
has made it constructive," he says, " and the trusts have 
made it practical." It is ethical because "the competi- 
tive system must ultimately break upon the solidarity 
of mankind," because the survival of the fit is not the 
whole result of evolution. The result still to be attained 
is "the improvement of all." And Socialism is idealistic 
because it not only contemplates, but gives reasonable 
promise of "a community from which exploitation, un- 
employment, poverty and prostitution shall be elimi- 
nated." 

But besides making an exposition of Socialism as a 
whole and in all its parts, Mr. Kelly aimed to make a 
book "for non-socialists." With this purpose in view he 
has kept closely to concrete statement and above all has 
tried to avoid vagueness and loose generalization. He 
has described possibilities in terms that all know and 



xii INTRODUCTION 

understand. With the precision of the trained legal 
mind, he seizes the essential point when he says: "It is 
not enough to be told that there are a thousand ways 
through which Socialism can be attained. We want to 
see clearly one way." With the last strength that he 
had to spend Mr. Kelly showed one way; and no bewil- 
dered wayfarer through our baffling civilization, however 
he may hesitate to set his feet upon it, will venture to 
say that it is not clear. 

Franklin H, Giddings. 

New York, April 19, 1910. 



II 



An immense revolution, a wonderful revolution, is 
opening in the mind of the human race; a new driving 
force is taking hold of the souls of men — the devotion to 
the welfare of the whole; a new sense, with all the inten- 
sity of a new-born feeling, is emerging in the consciousness 
of men— the sense that one cannot himself be healthy or 
happy unless the race is happy and healthy. A hundred 
theories appearing here and there, a thousand organiza- 
tions springing up, a million acts of individuals every- 
where, attest each day the presence and the growing 
power of this vast solidarizing movement. 

Among these manifestations throughout the world, 
the most pronounced and the most clearly defined is 
that compact, fiercely vital organization known as the 
international Socialist party. Yet the Socialist party 
is not the movement, any more than the cresting billow 
is the torrent. It is an imperatively necessary element; 



INTRODUCTION xiii 

but the movement itself is vastly broader and deeper 
than any manifestation of it. 

An uncounted multitude in all lands are gradually 
becoming conscious of this sweeping tendency and of 
their own part in it — a multitude as yet not bearing any 
specific title. Out of these a considerable number are 
fully conscious of the movement, and are willing par- 
takers. These we might call solidarists, in token of their 
conviction that the goal ought to be and will be an 
economic solidarity. But of even these it is only a part 
who are distinctively to be called Socialists, only those 
who have perceived two certain mighty facts: first, 
that men's mass-relations in the process of making a 
living are fundamental to their other relations, to their 
opinions and motives, and to all revolutions; and, second, 
that the chief agency in bringing about changes in the 
great affairs of the human race has always been and 
continues to be the pressure and clash between enduring 
masses of men animated by opposite economic interests. 
The Socialist is one who sees these social and historic 
facts and whose action is guided by such sight; the non- 
Socialist solidarist is one who, though animated by the 
socializing impulses, has not yet perceived these two most 
weighty facts. 

Now Edmond Kelly, as was natural from his antece- 
dents, was for nearly the whole of his life a non-Socialist 
solidarist. But, about two years before his death, 
being at the height of his powers of insight and intellect, 
he attained the clear vision of the " class-struggle/' and 
no longer had any doubts where he himself belonged 
in the army of humanity — he became and remained a 
comrade — a loyal comrade. 

There is a certain bit of doggerel, said to derive from 
Oxford, which tells us that: 



xiv INTRODUCTION 

"Every little boy or gal, 
Who comes into this world alive, 
Is born a little Radical, 
Or else a small Conservative." 

And this all-pervading division penetrates even that 
most radical of bodies, the Socialist party. That party 
has its own conservative and radical wings — its right 
and its left — and Edmond Kelly is distinctly of the 
right. 

One who is inclined by instinct to the one wing, and 
by logic to the other, can realize the indispensableness 
of both — the special contribution which each makes, 
and which the other cannot make, to the common cause. 
The motive of this note is to appeal to the comrades of 
the left not to shut their eyes to the value of this book, 
not to forego its special usefulness. For the very atti- 
tude of its author, which may be distaseful to them — his 
making appeals which they no longer make, his using 
forms of speech which they reject, his making so little 
use of that which is their main appeal, fit him especially 
to influence the minds of that numerous fringe of edu- 
cated persons who must evidently be first made "right- 
ists" before they can become "centrists" or "leftists." 
It may even be imagined that the difficult type of work- 
ing man, he who thinks himself too noble-minded to 
respond to class appeal, might begin to rouse himself 
if he could once be brought under the charm of this book. 

Aware that he had not long to live, Mr. Kelly hastened 
to finish the first draft of the book, and indeed he sur- 
vived that completion only two weeks. He knew that 
considerable editorial work was needed, and this he 
entrusted to Mrs. Florence Kelley, author of "Some 
Ethical Gains through Legislation" and translator of 
Marx' " Discourse on Free Trade," and of Friedrich Engels' 



INTRODUCTION XV 

work on the " Condition of the Working Class in Eng- 
land." She undertook and has fulfilled this trust, 
and has been aided throughout by the untiring labors 
of Shaun Kelly, the author's son. Thus this book of 
Mr. Kelly's is doubly a memorial of love — of his for man, 
and of ours for him. 

Rufus W. Weeks. 



CONTENTS 



Introductory Notes: page 

By Professor Franklin H. Giddings v 

By Rufus W. Weeks xii 

Introductory 1 

BOOK I 
WHAT SOCIALISM IS NOT 

CHAPTER 

I. Subjective Obstacles to the Understanding of 

Socialism 18 

Vested Interests 18 

II. Economic Conditions 23 

1. Bourgeois, Revolutionist, and Evolutionist 23 

(a) The Bourgeois Point of View 23 

(b) The Revolutionist Point of View 24 

(c) The Evolutionist Point of View 27 

III. Misrepresentation and Ignorance 31 

1 . Socialism is not Anarchism 31 

2. Socialism is not Communism 33 

3. Socialism will not Suppress Competition 36 

4. Socialism will not Destroy the Home 40 

5. Socialism will not Abolish Property 42 

6. Socialism will not Impair Liberty 46 

7. Conclusion 51 

BOOK II 

WHAT CAPITALISM IS 

Evils of Capitalism 53 

I. Capitalism is Stupid 57 

1 . Overproduction 57 

2. Unemployment 66 

xvii 



xviii CONTENTS 

CHAPTER PAGE 

I. Capitalism is Stupid (continued). 

3. Prostitution 79 

4. Strikes and Lockouts 86 

5. Adulteration 88 

it. Capitalism is Wasteful 94 

1. Getting the Market 95 

2. Cross Freights 96 

III. Capitalism is Disorderly 101 

1. Anarchy of Production and Distribution 102 

(a) Tyranny of the Market 102 

(&) Tyranny of the Trust 104 

(c) Tyranny of the Trade Union 106 

IV. Property and Liberty 112 

1. Origin of Property 113 

V. Results of Property 131 

1. The Guilds 135 

2. Trade Unions 140 

3. The Unsolved and Insoluble Problems of Trade 

Unionism 145 

4. Trusts 159 

(a) The Conflict between the Trust and the Trade 

Union 167 

(6) Advantage of Trusts over Unions 169 

(c) Advantage of Unions over Trusts 171 

VI. Money 176 

VII. Can the Evils of Capitalism be Eliminated by 

Cooperation 199 

BOOK III 
WHAT SOCIALISM IS 

I. Economic Aspect of Socialism 204 

II. Economic Construction of the Cooperative Common- 

wealth 235 

1. How Socialism May Come 239 

2. Reform and Revolution 243 

3. Possible Transitional Measures 248 

4. Farm Colonies 263 

5. Land 278 



CONTENTS xix 

CHAPTER PAGE 

II. Economic Construction of the Cooperative Common- 

wealth (continued). 

6. Summary of the Productive Side of Economic Con- 

struction 286 

7. Distribution 288 

8. Remuneration . 303 

9. Circulating Medium under Socialism 307 

10. Summary 313 

III. Political Aspect 317 

1. Education 325 

2. Churches 328 

3. Political Construction 329 

IV. Scientific Aspect 335 

1. Natural Environment 337 

(a) Struggle for Life or Competitive System 337 

(b) Cooperative System 342 

2. Human Environment 349 

3. Effect of Competitive System on Type 357 

4. Brief Restatement 360 

5. Can Human Nature be Changed by Law 364 

6. Summary 374 

V. Ethical Aspect 378 

1. Conflict between Science and Religion 378 

2. Conflict between Economics and Religion 389 

3. Socialism Reconciles Religion, Economics, and 

Science 395 

VI. Solidarity 402 

Appendix 413 

Index 433 



TWENTIETH CENTURY SOCIALISM 



INTRODUCTORY 

My reason for writing this book is that I do not know 
of any one book that gives in small compass to the unin- 
formed a comprehensive view of Socialism. It would be 
fatal to suggest to one not quite certain whether he wants 
to know about Socialism or not, that he should read the 
great economic foundation work of Karl Marx. 1 The 
excellent book of Emil Vandervelde, 2 which seems to 
me to contain one of the most compendious accounts 
of economic Socialism, is written from the Belgian and 
European point of view rather than from the American; 
it does not attempt to give either the scientific 3 or the 
ethical argument for Socialism, nor does it contain spe- 

1 "Capital," by Karl Marx. 

2 "Collectivism and Industrial Revolution," Emil Vandervelde. 

3 Engels and others have described Marxian or Economic Social- 
ism as scientific, on the ground that Marx was the first to reduce 
Socialism to a science. But the word science has become so 
inseparably connected in our minds with chemistry, physics, 
biology, zoology, and geology, etc., that it seems wiser to define 
Marxian Socialism as economic and to keep the word scientific 
for that view of Socialism which is built on the sciences proper 
and principally on biology. 



2 INTRODUCTORY 

cific answers to the objections which are most imminent 
in American minds to-day. The recent book by Morris 
Hillquit, 1 deservedly recognized as one of the leaders of 
the party in America, an authoritative, clear and admir- 
able statement of what the Socialist party stands for, 
seems to be addressed to the Socialist rather than to 
the non-Socialist. Innumerable books and pamphlets 
by Bernard Shaw, Sidney Webb, John Spargo, William 
Morris and others throw light on this enormous subject. 
But for years past when asked by the average American 
what one book would give him a complete account of 
Socialism, I have been at a loss what to recommend. 
The book that first opened my eyes to the possibilities 
of Socialism was " Fabian Tracts"; but I doubt whether 
this would appeal to many American readers. An 
economic mind must be given the economic argument; 
a scientific mind the scientific argument; an idealistic 
mind, the ideal; an ethical mind, the ethical; but the 
average mind must be given all four; for it is in the 
convincing concurrence of all four that the argument 
for Socialism is unanswerable. 

Another reason for writing this book is the desire to 
put Socialism firmly on the solid foundation of fact. 
It is the progress of science and the economic develop- 
ment of the last few years that have made Socialism 
constructive and practical. Science has made it con- 
structive and the trusts have made it practical. It 
no longer rests on the imagination of poets nor on the 
discontent of the unemployed. On the contrary, Science 
with its demonstration that man is no longer the mere 
result of his environment, but can become its master, 
teaches us that by constructing our environment with 
intelligence we can determine the direction of our own 

1 "Socialism in Theory and Practice." Macmillan, 1909. 



INTRODUCTORY 3 

development. The trusts, with their demonstration of 
the waste and folly of competition, teach us that what 
a few promoters have done for their own benefit the 
whole community can do for the benefit of all. 

Again, history has revealed a fact upon which the 
competitive system must ultimately break; it may 
break under the hammer of the new builder or through 
the upheaval of a mob; but that it must eventually 
break is as certain as that day follows night. This fact 
is the solidarity of mankind. Whether it was wise of 
the Few to share the government with the Many it is 
too late now to inquire. The thing has been done — 
aha jacta. And that the Few should imagine that, 
after having put a club in the hands of the Many with 
which they can, when they choose, at any election smash 
to pieces the machinery — political and industrial — that 
oppresses them; and having established a system of edu- 
cation — nay, of compulsory education — through which 
the Many must learn during their childhood, how upon 
attaining majority, they can use this club most effectually, 
the Many will refrain from using it — is one of those 
delicious inconsequences of the governing class which 
throws a ray of humor over an otherwise tragic scene. 

I do not believe it was in the power of the Few to 
perpetuate their reign; I think there are evidences of 
a Power working through Evolution to which even Her- 
bert Spencer has paid the tribute of a capital P, which 
ordained from the beginning that Man should progress 
not as his forbears did, through the survival only of the 
fit, but as Man has unconsciously for centuries been 
doing, through the improvement of all. I think this is 
the Power that some worship under the name of J ah 
and others under the name of God. But this view will 
not be insisted upon, for it is not necessary to insist 



4 INTRODUCTORY 

upon it. The fact of human solidarity will, I think, be 
demonstrated, 1 and it will, I hope, at the same time be 
shown that Socialism is no longer a theory born of dis- 
content, but a system developed by fact, and as inevitably 
so developed as the tiger from the jungle of India, or 
cattle from the civilization of man. 

Again, I do not think it is sufficient to demonstrate 
that Socialism is sound in theory. We have also to show 
that it is attainable in fact. 

The practical American will not be satisfied with being 
told that there are a thousand different ways through 
which Socialism can be attained. He does not want 
to be told how many ways there are to Socialism, but 
wants to be shown one way along which his imagination 
can safely travel. 

What the " bourgeois" wants to know is just how Social- 
ism is going to work. He cannot conceive of industry 
without capitalism, any more than he can conceive of 
the world without the sun. Some concrete picture must 
be presented to his mind that will enable him to under- 
stand that while capital is not only good, but essential, 
the capitalist is not only bad, but superfluous. Nothing 
less than a picture of industry actually in operation 
without capitalism will suffice; and this, therefore, I 
have attempted to draw. No pretence is made that the 
picture is the only possible Socialist state, or that it 
will ever be realized in the exact shape in which it is 
drawn. The only claim to be made for it is that it fur- 
nishes a fair account of an industrial community from 
which exploitation, unemployment, poverty and pros- 
titution are eliminated; that such an industrial community 
is more practical because far more economical than our 
own; and that it is the goal towards which, if we survive 

1 Book III, Chapter VI, 



INTRODUCTORY 5 

the dangers attending the present conflict between capital 
and labor, industrial and ethical evolution are inevitably 
driving us. 

Again, there is probably no feature connected with 
Socialism that it is more important to demonstrate and 
define than its economy. It occurred to me that we 
possessed in our official reports, and particularly in the 
13th Annual Report of the Bureau of Labor, figures 
which would enable us to arrive at a considerable part 
of this economy with some mathematical certainty. 
I pointed out my plan to Mr. J. Lebovitz, of the Library 
of Congress, Washington, D. C, who has a better talent 
for statistics than myself, and I cannot but congratu- 
late myself and my readers upon the results to which, 
thanks to his help, we have jointly come. 

It must be admitted that the figures in our possession 
do not enable us to estimate the whole economy of 
Socialism; but they do enable us to give a tentative 
estimate of how many hours a workingman would have 
to work to produce the things which the average work- 
ingman consumes if no account be taken of profit, rent, 
interest, and the cost of distribution. Of course, though 
profit, interest and rent would be eliminated in a coopera- 
tive commonwealth, we should still be subject to the 
cost of distribution and, therefore, the figures we arrive 
at are incomplete in the sense that we have to take into 
account the fact that they do not include this cost. 
But there would be economies exercised in a cooperative 
commonwealth, such as the economy of insurance, of 
advertising, of unnecessary sickness, of strikes and lock- 
outs, of the cost of pauperism, crime and in some measure 
that of dependents, defectives and delinquents, etc., 
which would probably pay the cost of distribution. I 
feel, therefore, that although our figures are not absolute, 



6 INTRODUCTORY 

they do furnish a starting-point more satisfactory than 
has heretofore been obtained. 

The most impelling reason for writing this book is 
the persistently false and misleading statements made 
regarding Socialism by the very persons whose business 
it is to be informed on the subject. For years now the 
men we elect to office as best fitted to govern us — Pres- 
idents and Presidential candidates, Roosevelt, Taft and 
Bryan, have in spite of repeated protests and explana- 
tions been guilty of this offence. Mr. Roosevelt stands 
too high in the esteem of a large part of our voting public, 
and I myself entertain too high an opinion of his ability, 
for such charges as those he has made against Socialism 
to go unanswered. And in answering them I shall take 
as my justification the platform of the Socialist party, 1 
which must be carefully read by all who want to under- 
stand what Socialism really is in the United States of 
America. It is of course impossible in a platform to 
give the whole philosophy of Socialism, but the platform 
does state with sufficient precision what Socialists stand 
for to make it impossible for anyone who has read it 
to remain any longer under the false impression created 
by ignorance or deliberate misrepresentation. 

I take Mr. Roosevelt's articles in the Outlook as the 
special object of my explanations, not only because they 
express very widespread fallacies regarding Socialism, 
but because they emanate from one who for popularity 
and reputation casts every other American in the shade; 
and also because, for this reason, his utterances not only 
command the attention of the foolish — this he easily 
gets — -but should also, in view of his position, arrest 
that of those who tend by his exaggerations to be es- 
tranged from him. 

1 See Appendix. 






INTRODUCTORY 7 

So I have felt it an urgent duty to explain not only 
what Socialism is, as Hillquit, Vandervelde, Thompson, 1 
and many others have so ably done, but specifically to 
point out what it is not: That it is not Anarchism, but 
order; not Communism, but justice; that it does not 
propose to abolish competition, but to regulate it; nor 
to abolish property, but to consecrate it; nor to abolish 
the home, but to make the home possible; nor to curtail 
liberty, but to enlarge it. 

Now if this last is to be done, it is indispensable to 
have clear notions as to what liberty is; no intelligent 
understanding of liberty is possible unless there is an 
equally intelligent understanding of property, which 
is more closely connected with liberty than is generally 
recognized. The necessary relation between property 
and liberty has escaped some of our ablest lawyers. Just 
after James C. Carter had finished his argument in Paris 
on the Seal Fishery case and was preparing a supple- 
mentary brief that he had been given permission to file, 
he told me that he felt it necessary to study up the 
fundamental question of what property was and had been 
advised to read Proudhon! I did not know much about 
Socialism at that time, but did know enough to explain 
to him that Proudhon was an anarchistic communist; 
and asked him if he thought the court was disposed to 
listen to this kind of argument. Mr. Carter was shocked 
in the extreme, and lowering his voice, asked, a little 
shamefacedly, what Anarchism and Communism were, 
and were they the same as Socialism. This led to a 
discussion of property, of the views held regarding it by 
Socialists, Communists and Anarchists respectively; 
and to the strange conclusion that the brief which Mr. 
Carter was preparing in order to maintain the liberty 

1 "The Constructive Program of Socialism," Carl D. Thompson. 



8 INTRODUCTORY 

of the United States to protect seals as the property 
of humanity at large was Socialism Simon pure! To 
his dismay he found himself on the verge of preaching the 
very doctrine which of all doctrines he most abhorred! 

I do not know any standard work on Socialism that 
enters carefully into the nature of these things. I 
attempted it in " Government or Human Evolution/' to 
which I shall have occasion sometimes to refer. But 
this book was addressed to students of Political Science 
and is not short or compendious enough for the general 
public. 

In a word, I have written this book to supply what 
I believe to be a crying need — for a compact, simple 
statement of what Socialism is not, of what Socialism 
is, how Socialism may come about, and particularly 
distinguishing modern Socialism from the crude ideas 
that prevailed before Marx, Darwin and the develop- 
ment of trusts. 

The public imagines to-day that Socialism is Utopian. 
This is singularly erroneous. Socialism is the only in- 
telligent, practical system for providing humanity with 
the necessaries and comforts of life with the least waste, 
the least effort and the least injustice. 

The competitive system under which these things are 
now produced and distributed has been condemned by 
the business men whose opinions the business world 
most respects, because it involves infinite labor to a vast 
majority of the race and useless cost to all, without, 
I venture to add, assuring happiness to any. 

Socialism, on the other hand, presents a simple, obvious 
and unanswerable solution of the manifold problems 
presented by the competitive system. This solution 
ought to appeal to business men because it undertakes 
to do for the benefit of the nation what our greatest 



INTRODUCTORY 9 

business men have been engaged for some years in doing 
for the benefit of themselves. 

It is not likely that the American public, once it under- 
stands the situation, will refuse to adopt the only prac- 
tical method of ridding itself of a wasteful system and a 
corrupt government just because the few who profit 
by it for very obvious reasons do not want them to. All 
the public needs is a clear understanding of what Socialism 
really is; how it is certain to come eventually; and how 
it is best that it should come. 

Many Socialists make the mistake of asking us to look 
too far ahead. We are not all equally far-sighted. 
Some are very near-sighted. In fact the habit of look- 
ing closely at our ledgers and at our looms tends to make 
us near-sighted. Socialists too may be wrong in their 
forecast centuries ahead. This book therefore makes a 
distinction between those things that can be demonstrated 
and those which, on the contrary, are still matter for 
mere speculation. 

It can be demonstrated that a partial substitution of 
cooperation for competition in definite doses will put an 
end to pauperism, prostitution and in great part to 
crime. Whether a wholesale substitution of cooperation 
for competition will still further promote human develop- 
ment and happiness is a matter of speculation— as to 
which men can legitimately differ. 

The contention made in this book is that a substitu- 
tion of cooperation for competition in the dose herein 
prescribed must put an end to the three gigantic evils 
above mentioned, and incidentally confer upon us a 
larger and truer measure of liberty and happiness than 
the world has ever yet known. 

One word about the language of this book. As it is 
addressed to persons not familiar with the Socialist 



10 INTRODUCTORY 

vocabulary, I am going to abstain to the utmost possible 
from using this vocabulary. I am not going to use the 
words " surplus value" when the more familiar word 
" profit" can be used with practically the same advantage. 
I am going to avoid the expression "materialist in- 
terpretation of history" when the words "economic 
interpretation of history" are equally correct and less 
likely to mislead. And I am above all going to avoid, 
wherever I can, the use of the words "individualism" 
and "individualists," because these words have been 
already used by capitalists to beg the whole question. 
Capitalists have quietly appropriated this word to them- 
selves and Socialists have been foolish enough to permit 
them to do it. Capitalism does indeed promote a cer- 
tain kind of individualism; but we shall have to discuss 
later just what is the nature of the individualism pro- 
moted by existing conditions and compare it with the 
individualism that will be promoted by Socialism. I 
think it will become clear that it is the peculiar province 
of Socialism to rescue the vast majority of men from 
conditions which make the development of the individual 
impossible, and to put opportunities of individual devel- 
opment at the disposal of all; that, indeed, the highest 
type of individualism can be realized only in a cooperative 
commonwealth that will give to every man not only 
opportunity for developing his individual talents, but 
leisure for doing so— the very leisure of which the vast 
majority are deprived under the present system and of 
which the few who have it profit little. 

It is not easy to find words to substitute for individual- 
ist and individualism. The word that best describes 
the individualist is "egotist." But the use of the word 
"egotist," for the very reason that it is the truest word 
for describing the individualist, would arouse such pro- 



INTRODUCTORY 11 

test in the minds of those so designated as perhaps to 
prevent this book from being read by the very persons 
to whom it is chiefly addressed. 

The word "capitalist" cannot be used for this purpose 
either, because by no means all who have capitalistic 
ideas are capitalists, and some capitalists are free from 
capitalistic ideas. 

So instead of the words "individualist," "egotist" 
and "capitalist," I am going to use the French word 
"bourgeois." It seems to convey what it is intended 
to convey with least error and most consideration for 
capitalistic susceptibilities. It is true that "bourgeois" 
is a French word and should be avoided in consequence, 
but it has been now so acclimated to our language that 
many editors print it without quotation marks. The 
word "bourgeois" roughly includes all those who have 
property or employ labor, or who can be psychologically 
classed with these. It includes the small shop-keeper 
who keeps a clerk, or perhaps only a servant, and the 
millionaire who keeps thousands of men at work in 
his factories, mines, railroads or other industries. It 
includes the large farmer who employs help, but not 
the small farmer who employs no help; it includes 
the lawyer, the broker and the agent who depend 
upon the capitalist but are lifted above the hunger 
line. 

Instead of the word "individualism," I shall use an- 
other French expression which has also become accli- 
mated — that is to say, laissez faire; for laissez faire 
are words adopted by the bourgeois to describe the 
system for which he generally stands. This expression 
is peculiarly appropriate to-day, when we hear our 
business men clamoring to be "let alone." Indeed were 
it not for the awkwardness of the expression "let-alone- 



12 INTRODUCTORY 

ism/' this literal translation of laissez /aire would just 
suit my purpose. 

It is true that the laissez faire of to-day differs 
from that of the last century. For there is at present 
a very wide belief in the possibility of controlling cor- 
porations, and whereas the laissez faire of the last century 
went so far as to deny the necessity of government 
control, that of to-day very largely admits it. By 
laissez faire, therefore, I mean the controlled laissez 
faire that now prevails as well as the uncontrolled laissez 
faire of a century ago, the essential difference between 
laissez faire and Socialism being that the former implies 
leaving the production and distribution of everything 
to private capital whether controlled or uncontrolled 
by government; whereas Socialism implies putting pro- 
duction and distribution of at least the necessaries of 
life into the hands of those who actually produce and 
distribute them without any intervention or control 
of private capital whatever. 

I have been careful to take my facts and figures not 
from Socialist publications, but from government publica- 
tions or economists of admitted authority. I have, too, 
in every case where it seems necessary quoted my author- 
ity so that there may be no doubt as to the source from 
which my facts are drawn. 

In conclusion it must be stated that there are four 
very different standpoints from which Socialists start — 
the economic, the political, the scientific and the ethical. 

Ethical writers began by disregarding the economic 
side of Socialism altogether, and some economic Socialists 
are therefore disposed to despise ethical and so-called 
Christian Socialism; whereas the ethical view is not 
only useful, but essential to a complete understanding 
of the subject. 



INTRODUCTORY 13 

The scientific view of Socialism has been comparatively 
little treated, but it is not for that reason the least im- 
portant. On the contrary, Herbert Spencer and his 
school have built a formidable opposition to Socialism 
based upon pseudo-scientifie grounds. It becomes, there- 
fore, important to point out the extent to which Herbert 
Spencer was wrong and Huxley right in the application 
of science to this question. 

My own conviction is that the highest Socialism is 
that which reconciles all four views — the economic, 
the political, the scientific and the ethical. But as this 
is a work of exposition rather than of controversy, I 
have abstained from insisting upon this view and have, 
on the contrary, endeavored to give a fair account of 
all four arguments, in the hope that those who are in- 
clined to the economic view may adopt it for economic 
reasons; those inclined to the political view may adopt 
it for political reasons; those who are attracted by the 
scientific view may adopt it for scientific reasons; and 
those who are attracted by the ethical view may adopt 
it for ethical reasons, leaving it to time to determine 
whether the strongest argument for Socialism is not 
to be found in the fact that it is recommended by all 
four. 



BOOK I 
WHAT SOCIALISM IS NOT 



Socialism is not a subject which can be put into a 
nutshell. On the contrary it resembles rather a lofty 
mountain which has to be viewed from every point of 
the compass in order to be understood. Mont Blanc, 
approached from the North or Swiss side, presents the 
aspect of a round white dome of snow; approached from 
the South or Italian side it presents that of a sharp 
black peak of rock. Yet these totally different aspects 
belong to the same mountain. It takes a mountaineer 
about three days to go round Mont Blanc on foot; it 
takes an ordinary pedestrian who has to stick to roads 
about a week. It is probable, therefore, that the reader 
new to the subject will take at least a week to understand 
Socalism, which is quite as big a subject as Mont Blanc 
and considerably more important. He is likely, however, 
to take much more than a week if, as happens in most 
cases, he starts in a forest of prejudices any one of which 
is sufficient to obstruct his view. In the confusion in 
which the ordinary citizen finds himself, owing to this 
forest of prejudices which constitutes the greatest obstacle 
to the understanding of Socialism, he may very possibly 
wander all his life, and the first duty, therefore, of a book 

14 



WHAT SOCIALISM IS NOT 15 

on Socialism is to take him out of the forest which he 
cannot himself see " because of the trees/' 

The great enemy to a sound understanding of Socialism 
used to be ignorance; to-day, however, there is less ignor- 
ance, but a great deal more confusion; and the confusion 
arises from two sources: confusion deliberately created 
by false denunciations of Socialism, and confusion uncon- 
sciously created by personal interests and prejudice. 

The confusion arising from these two sources may be 
described as subjective obstacles to Socialism because 
they exist within ourselves. They are to be distin- 
guished from objective obstacles to Socialism which 
exist outside of ourselves. For example, if a majority 
of us were in favor of adopting Socialism, we should 
still find many objective obstacles to it; for example, 
if we proposed to expropriate the trusts, we should 
undoubtedly be enjoined by the courts; we should 
find ourselves confronted with federal and State con- 
stitutions; we perhaps would have to amend these 
constitutions. These difficulties are outside of us. But 
before we reach these obstacles, we have to overcome 
others that exist within us and are to-day by far the 
most formidable. These subjective obstacles reside in 
our minds and are created there by vested interests, 
property, ignorance and misrepresentation. We are 
all of us under a spell woven about us by the economic 
conditions under which we live. 

For example, the workingman who has saved a few 
hundred dollars and goes out West to take up land, 
thinks that by so doing he will escape from wage slavery. 
He does not know that he is not escaping slavery at all, 
but only changing masters. Instead of being the slave 
of an employer, he becomes the slave of his own farm. 
And the farm will prove an even harder taskmaster 



16 WHAT SOCIALISM IS NOT 

than a Pittsburg steel mill, for it will exact of him longer 
hours during more days of the year and seldom give him 
as high a wage. Nevertheless, the fact that he owns 
the farm — that the farm is his property— awakens in 
him the property instinct that tends to rank him on 
election day by the side of the bourgeois. 

So also the store-keeper who, because he owns his 
stock, buys goods at a low price and sells them at a high, 
and makes profit, considers himself superior to the wage- 
earner, unmindful of the fact that his store adds to long 
hours and low wage the anxieties of the market and that, 
thanks to trusts and department stores, he is kept per- 
petually on the ragged edge of ruin. 

The clerk, too, whose only ambition is to rise one grade 
higher than the one which he occupies, is prevented by 
the narrowness of his economic field from appreciating 
the extent to which he is exploited. Instead of being 
bound by class consciousness with his fellow clerks, he 
is, on the contrary, in perpetual rivalry with them, and 
is likely to be found on election day voting with the owner 
who exploits them all. 

And even the wage-earner, the factory hand, who is 
the most obviously exploited of all, is in America still 
so absorbed by his trade union, by his fight with his 
employer, that he has not yet learned to recognize how 
much stronger he is in this fight on the political than on 
the economic field. So he too, instead of recognizing 
the salvation offered to him by Socialism as his fellow 
workingmen in Germany do, allows himself regularly 
to be betrayed into voting for one of the capitalist parties 
which his employer alternately controls. 

And the darkness in which these men are regarding 
matters of vital interest to them is still further darkened 
by their own ignorance, by the ignorance of those around 



WHAT SOCIALISM IS NOT 17 

them and, I am afraid I must add, by deliberate mis- 
representation. 

Let us begin by extricating ourselves from the forest 
of prejudice that makes all clearness of vision impossible 
and, when we can see with our eyes, we shall take a 
rapid walk around this mountain of Socialism, as all 
climbers do, if only to choose the best points from which 
to climb it. 



CHAPTER I 

SUBJECTIVE OBSTACLES TO THE UNDERSTANDING OF 

SOCIALISM 

Vested Interests 

There is in the archives of the House of Commons 
a petition filed by the gardeners of Hammersmith in 
opposition to a proposed improvement of the country 
roads, which would enable gardeners further removed 
from London to compete with Hammersmith gardeners 
on the London market. They regarded themselves as 
having a vested right in bad roads and actually took these 
so-called rights sufficiently seriously to petition Parlia- 
ment not to improve roads which were going to bring 
them into competition with gardeners already at a dis- 
advantage by being further removed from the market 
than themselves. 

This is an illustration of the extent to which the human 
mind can be perverted by personal interest. But there 
is another illustration of so-called vested interests much 
more revolting in its nature and yet perhaps more justified 
in fact. When the cholera broke out in Paris, in 1830, 
and it was believed to have been brought into the country 
through rags, a bill was presented before the French 
Parliament for the destruction of all deposits of rags in 
the city. This was violently opposed by the rag pickers, 
who pointed out that these rags constituted their only 
source of existence, and they found many members 

18 



OBSTACLES TO UNDERSTANDING SOCIALISM 19 

of the French Parliament to support their view. We, 
who can dispassionately consider the situation of these 
rag pickers, have to admit that, if they could earn their 
living in no other way than rag picking, it would be a 
mistake for Parliament to deprive them of their source 
of living without giving them some other employment. 
But it would be worse still were Parliament to allow Paris 
to be decimated by cholera because the rag pickers 
claimed a vested right in pestiferous rags. 

A similar situation presents itself in the city of New 
York to-day. The tenement-house commission has im- 
posed upon tenement-house owners certain obligations 
which involve an expenditure of considerable sums of 
money, and many of our best citizens are indignant 
because the tenement-house law is not always rigidly 
enforced. Yet all who have followed the recent rent 
strike on the East Side, know that the tenement houses 
there are in large part owned by men as poor as those 
who live in them. The immense congestion in this dis- 
trict brought about such competition for lodgings that 
speculators were enabled to buy tenement houses at their 
utmost value and to sell them at a still higher price by 
persuading the thriftiest of the inhabitants of the dis- 
trict that, if they purchased these tenement houses and 
acted as their own janitors and agents, they could earn 
more money than was then being earned. Victims were 
found who have put all their savings into these tenement 
houses, leaving the larger part of the purchase on mortgage. 
These new landords raise the rent in order to make the 
houses pay for themselves. These pauper tenement- 
house owners are in the same position to-day as the 
Paris rag pickers of 1830. 

The question of what, if any, compensation should be 
paid when the state interferes with vested rights cannot 



20 WHAT SOCIALISM IS NOT 

be decided by any general rule. The demand for com- 
pensation by the Hammersmith gardeners was absurd; 
but that of the rag pickers was justified; that of poor 
tenement-house owners on the East Side seems also to be 
justified; but if the state in taking over these unwhole- 
some tenements were to find one in the hands of a spec- 
ulator, would compensation be to the same degree 
justified? 

So these questions seem to become questions of detail; 
they cannot be disposed of by a general rule: " there 
shall be compensation" or " there shall not be compensa- 
tion." Above all things, these so-called general rules 
must not be erected into dogmas or "principles" under 
the standard of which Socialists are to group themselves 
and fight one another. 

It is interesting to consider in connection with this 
subject the geographical character of the objections to 
Socialism as illustrated by the attitude taken by England 
and America respectively on the subject of municipal 
ownership. 

In England, municipal ownership of gas is the rule 
rather than the exception. Indeed Manchester has 
owned its own gas plant from 1843, and has furnished 
the public with gas at 60 cents per thousand cubic feet, 
and even at that price x made a net profit in 1907-8 of 
£57,609, which has been applied to the diminution 
of rates and extension of the service. Birmingham, 
which had to pay an extravagant price for its gas plant, 
nevertheless immediately reduced the price of gas and 
brought it down from $1.10 under private ownership 
to 50 cents to-day. In England, therefore, it is per- 
fectly respectable to approve of municipal ownership 
of gas. But inasmuch as water has been until very lately 

1 "Municipal Year Book," 1909, p. 482. 



OBSTACLES TO UNDERSTANDING SOCIALISM 21 

furnished to London in great part by a private company 
chartered by James I. the stock of which has increased 
in value a thousand per cent and which counts among 
its stockholders royalty itself, anybody until very lately 
who proposed municipal ownership of water in London, 
was regarded as a dangerous anarchist. 

The New York situation is just the reverse. For 
New York, after having tried private ownership of water 
and abandoned it as early as 1850 on account of the 
corruption that resulted therefrom, undertook public 
ownership of water with such success that no disinterested 
citizen to-day wants to go back to the old plan. So a 
New Yorker can advocate municipal ownership of water 
and still be regarded as a perfectly respectable citizen; 
but should he venture to favor municipal ownership of 
gas he is at once classed with those whose heads are only 
fit to be beaten with a club. 

How long are we going to allow our opinions to be 
manufactured for us by water companies in London and 
gas companies in New York? Obviously we cannot take 
an impartial and intelligent view of this great question 
until we have divested ourselves of the prejudices created 
by vested interests. If the propertied class, which is 
committed to existing conditions by the fact that it 
profits by them, is willing to yield no inch to the rising 
tide of popular dissatisfaction and the awakening of 
popular conscience, it is probable that the revolutionary 
wing of the Socialist party will prevail, if only because 
under these circumstances the evolutionary wing will 
not be allowed to prevail. If, on the other hand, the 
propertied class become alive not only to the danger of 
undue resistance, but also to the reasonableness and 
justice of the Socialist ideal, there is no reason why vested 
interests, save such as owe their existence to downright 



22 WHAT SOCIALISM IS NOT 

robbery and crime, should materially suffer in the proc- 
ess of Socialist evolution. If this be true the words 
"menace of Socialism' ' will turn out to be inappropriate 
and unfounded. Sound Socialism has no menace for 
any but evil-doers. 

Having now climbed out of the forest of prejudices 
created by private or so-called vested interests, let us 
next consider the different points of view created by 
temperament and economic conditions, from which the 
subject of Socialism tends to be regarded. 



CHAPTER II 
ECONOMIC CONDITIONS 

Bourgeois, Revolutionist, and Evolutionist 

Every man who is earning a living is profoundly 
affected by all that affects his living. If Socialism seems 
to threaten this living, he instinctively and often un- 
consciously repudiates it. From one point of view, 
Socialism presents a more formidable aspect than from 
another. It takes a very skilled climber to scale Mont 
Blanc from the Italian side, whereas from the Swiss side 
it is simply a matter of endurance. The same thing is 
true of Socialism. 

Now there are three distinct and opposing points of 
view: The bourgeois point of view, the revolutionist 
point of view, and the evolutionist point of view. 

* 
(a) The Bourgeois Point of View 

The bourgeois point of view is that which students 
of political science have been in the habit of describing 
as individualism. But there are objections to this use 
of the word individualism, as will appear later on. 

The bourgeois view is that the production and dis- 
tribution of the things we need can best be conducted 
by allowing every man to choose and do his own work 
under the stimulus of need when poor and of acquisitive- 
ness when rich. This system is well described in the 

23 



24 WHAT SOCIALISM IS NOT 

maxim: "Every man for himself and the devil take the 
hindmost." The first part of this maxim has in it con- 
siderable merit, for it encourages the self-reliance that 
has made the prosperity of America. But the latter 
part merely expresses a pious wish that is seldom gratified. 
The devil does not take the hindmost. The devil leaves 
them here to stalk through our highways and streets, a 
permanent army of about 500,000 tramps, swelled at 
all times by thousands and in such times as these by 
millions of unemployed. 1 

The bourgeois view is that of the man who owns or 
expects to own property; the bourgeois class represents 
a small proportion of the whole population, and is some- 
times described as the propertied class. 

But as the propertied class is in control of our schools, 
colleges and press, it has hitherto made the opinions of 
the vast majority. Thus the bourgeois view is not only 
that of the propertied class, but also that of most of those 
who have no property. It is the view of the man in 
the street. 

Lately, however, Socialism has been making inroads 
into the opinions of both classes, and this has divided 
Socialists into two groups which, though generally found 
fighting under the same banner, nevertheless take dif- 
ferent views of the subject, which tends to confuse the 
uninitiated. These two views are conveniently described 
as revolutionist and evolutionist. Let us study the 
revolutionist point of view first: 

(6) The Revolutionist Point of View 

Marx rendered a great service by pointing out the 
extent to which the non-propertied class is exploited by 

1 December, 1908. 



ECONOMIC CONDITIONS 25 

the propertied class — the proletariat by the bourgeois — 
the factory hand by the factory owner. Marx, however, 
did not himself confine Socialism to the struggle between 
the factory hand and the factory owner. But there 
has arisen out of the Marxian philosophy a school which 
has emphasized the observation of Marx that the factory 
hands increased in number while the factory owners 
decreased in number, and that this tends to produce a 
conflict between the two — a revolution from which the 
factory hand must emerge released from the incubus of 
the factory owner. Two ideas dominate this school: 
the class struggle — a struggle practically confined to 
the factory worker on the one hand and the factory owner 
on the other; and the revolution — the eventual clash 
between the two. The triumph of the factory hand is, 
according to this school, to result in the complete over- 
turn of the whole social, industrial and economic fabric 
of society, the community 1 succeeding to the individual 
in the ownership of all land and all sources of produc- 
tion — all profit now appropriated by the factory owner 
accruing to the community and inuring to all the citizens 
of the state. 

This revolutionist school regards Socialism from the 
point of view of a class that has no property — the pro- 
letariat — just as the bourgeois looks at Socialism from 
the point of view of those w 7 ho have property. Both 
points of view tend to be partial; the bourgeois tends to 
see only what is good for himself in existing conditions 
and all that is bad for him in Socialism; the revolutionist 
tends to see all that is bad for him in existing conditions 

1 1 am careful to use the word " community ' ' and not the word 
"state," for state ownership is not Socialism. The Prussian State 
stands for state ownership, and even Mr. Roosevelt would not 
characterize the Prussian Government as Socialistic. 



26 WHAT SOCIALISM IS NOT 

and only what is good for him in the proposed new 
Socialism. This fact tends to make revolutionists 
dominate the Socialist party (which is mainly recruited 
from the proletariat) and is, therefore, entitled to the 
most serious consideration. Private interest is the dom- 
inating motive of political action to-day. It is the 
avowed motive of the bourgeois. He has, therefore, no 
excuse for denouncing this same motive in the pro- 
letariat, all the less as the bourgeois has to admit that 
his industrial system produces pauperism, prostitution, 
and crime; whereas the proletariat points out that 
Socialism will put an end to pauperism and prostitution 
and in great part also to crime. 

Because revolutionists believe that this change cannot 
be effected without a revolution— without a transfer 
of political power from the bourgeois to the proletariat 
— they speak of their movement as revolutionary, and 
often say that Socialism must come by revolution and 
not by reform. 

But these words must not be allowed to mislead. 
Although the Socialist platform says that "adequate 
relief" cannot be expected from "any reform of the 
present order," it nevertheless embraces a series of re- 
forms entitled "Immediate Demands." This is proof 
positive that the Socialist party is not opposed to legisla- 
tive measures that in the bourgeois vocabulary are known 
as reforms, since it advocates them. 

Socialists make a distinction between legislation that 
tends to transfer political power from the exploiters to 
the exploited and those that do not; the former are 

termed revolutionarv and the latter are termed mere 

«/ 

reforms. The former are what they stand for. But 
they do not for that reason remain indifferent to legisla- 
tion that improves human conditions. On the contrary, 



ECONOMIC CONDITIONS 27 

the immediate demands of the Socialist platform 
include : 

The scientific reforestation of timber lands and the 
reclamation of swamp lands; the land so reclaimed to 
be permanently retained as a part of the public domain: 

The enactment of further measures for general educa- 
tion and for the conservation of health. The Bureau 
of Education to be made a department. The creation 
of a department of public health. The free administra- 
tion of justice. 

Obviously, therefore, even revolutionary Socialists 
advocate certain reforms; but they will be content with 
nothing less than the transfer of political power from 
those who now use it ill to those who will use it 
better. 

Last, but not least, revolution does not in the Socialist 
vocabulary involve the idea of violence. It is used in 
the same sense as we use the expression "revolution of 
the planets/' " revolution of the seasons," " revolution 
of the sun." Undoubtedly there are Socialists willing 
to use violence in order to attain their ends just as there 
are Fricks willing to use Pinkerton men, and mine owners 
willing to use the militia to attain theirs. But the idea 
of violence has been expressly repudiated by the leaders 
of the Socialist party. And the word "revolution" 
must not be understood to include it. This question 
is studied in fuller detail in Book III, Chapter II. 

(c) The Evolutionist Point of View 

The evolutionist point of view claims to be wider than 
either of the foregoing. The evolutionist is not content 
to study Socialism from the point of view of any one class. 
He undertakes to climb out of the forest of prejudices 



28 WHAT SOCIALISM IS NOT 

created by class to a point where he can study Socialism 
free from every obstruction. He studies Socialism from 
the point of view of the whole Democracy, including the 
employer, the employee, and those who neither employ 
nor are employed; as, for example, the farmer who farms 
his own land without the assistance of any farm hands 
outside of his own family. From this point of view, 
he can denounce the evils of the existing system of pro- 
duction and distribution — if system it can be called 1 — 
without the bitterness that distorts the view of the 
victims of this system, and can therefore see perhaps more 
clearly the methods by which the evils of the existing 
system can be eliminated. 

The evolutionist points to history to prove that forcible 
revolution is generally attended by great waste of property 
and life, and is followed by a reaction that injuriously 
retards progress. He therefore seeks to change existing 
conditions without revolution, by successive reforms. 
This class of Socialist is denounced by revolutionists 
under a variety of names. He is called a parlor Socialist, 
an intellectual Socialist, but perhaps the name that 
carries with it the most contempt is that of step-by-step 
Socialist. He answers, however, that when he finds his 
progress arrested by a perpendicular precipice such as 
we are familiar with at the top of the Palisades, he re- 
frains from throwing himself — or advising his neighbors 
to throw themselves — headlong into the abyss, but 
takes the trouble to find a possibly circuitous way round. 
He will not consent to sit at the top of the precipice until 
he grows wings, as the Roman peasant sat by the Tiber 
"until it ran dry." The step-by-step Socialist is content 
to adopt a winding path which sometimes turns his back 
to the place which he wishes to reach, because he holds 

1 Book II, Chapter III. 



ECONOMIC CONDITIONS 29 

in his hand a compass whose unerring needle will bring 
him eventually to the desired goal. 

Again, the evolutionist claims to be supported by 
ethical and scientific considerations which the revolu- 
tionary Socialist regards as of secondary importance. 
But for the present it is convenient to postpone the 
study of the ethical and the scientific aspects of Socialism 
and to content ourselves with stating two principal 
claims made by the evolutionist, viz.: 

First: that his view is likely to be clearer than that of 
either the bourgeois or the revolutionist, because it is not 
obstructed by class interest; 

Second: that his policy is likely to be wise, because it 
is neither stationary as that of the bourgeois nor head- 
long as that of. the revolutionist. 

In conclusion, the revolutionist keeps his eye fixed on 
the horizon — perhaps it may even be said that he fixes 
his eye beyond the horizon, if that be possible; he looks 
forward to a state of society which, because it seems 
unrealizable to-day most of us are inclined to regard as 
visionary; and in presenting to us a commonwealth in 
which every personal interest will be vested in the com- 
munity, he attacks at once the personal interests of 
every man who owns property in the country. Ob- 
viously, if all agriculture is to be owned by the community, 
every farmer will lose his farm. If all the factories are 
to be owned by the community, every factory owner will 
lose his factory. If all distribution is to be managed by 
the community, every storekeeper will lose his store. 
The revolutionary Socialist therefore raises against him- 
self every property owner in the land; and all the more 
because there is division in the ranks of revolutionists 
as regards compensation, to which I have already re- 
ferred. (See Vested Interests, p. 18.) 



30 WHAT SOCIALISM IS NOT 

The evolutionist on the contrary confines his atten- 
tion for the present to existing conditions. He adopts, 
it is true, as an ultimate goal the cooperative common- 
wealth advocated by the revolutionists. It is indeed the 
point to which his compass is always directing him. It 
constitutes the ideal to which he believes the race wilt 
eventually adapt itself. But in addition to historical 
fact regarding the cost of revolution in the past, and in 
view of certain other scientific facts which will be dwelt 
upon later, he recognizes that personal or vested interests 
are likely to interfere more than anything else with the 
adoption of Socialism as an ultimate goal, and that these 
interests therefore no statesman can afford to disregard. 



CHAPTER III 

MISREPRESENTATION AND IGNORANCE 

Michaelangelo has said that sculpture is the art 
of chipping off superfluous stone. The sculptor sees a 
statue in every block. This is what Whistler used to 
call the " divine art of seeing." The sculptor's task is 
to remove those parts of the block that hide the statue 
from the layman's eye. So the Socialist sees the coopera- 
tive commonwealth imprisoned within the huge, rough, 
cruel mass that we call modern civilization, and his task 
is to remove from the beautiful form he sees the errors 
which mask it from the view of the unenlightened. If 
we can but remove these errors our task is in great part 
accomplished; and the first of these errors is that which 
confounds Socialism with Anarchism. 

§ 1. Socialism is not Anarchism 

Nothing is more unjustified than the confusion which 
exists in people's minds between Anarchism and Social- 
ism. This confusion is not altogether unnatural, for 
Socialism and Anarchism have one great feature in com- 
mon — both express discontent with existing conditions. 
The remedies, however, propounded by the Anarchists 
for evil conditions and those propounded by Socialists 
are contradictorily opposite. They are so opposite that 

31 



32 WHAT SOCIALISM IS NOT 

the bourgeois turns out to be more nearly associated with 
the Anarchist than the Socialist is. 

The theory upon which our present economic and 
political conditions are founded is that the less government 
interferes with the individual's action, the better. This 
theory may be said to have taken its start at the period 
of the French Revolution, and is generally connected in 
the minds of English-speaking people with Adam Smith, 
the Manchester School of laissez faire, the earlier works 
of John Stuart Mill, and all the works of Herbert Spencer. 
When, however, the pernicious consequences of allowing 
every individual to do as he chose with his own became 
felt, as for example in the poisoning of rivers by allowing 
every factory to pour its waste into them; and in de- 
generation of the race through unlimited exploitation 
of women and children in factories and mines, govern- 
ments all over the world have been obliged as measures 
of self-defence to enact laws limiting individual action. 
The individualism of the beginning of last century has 
been gradually leading to the Socialism of to-day, Social- 
ism being, among other things, an intelligent limitation 
of the abuse of property in accordance with a precon- 
ceived plan, instead of spasmodic limitation of the abuse 
of property forced upon us by the pernicious conse- 
quences thereof, often creating new abuses as bad as 
those suppressed. 1 While therefore the Socialist asks 
that the functions of government be extended sufficiently 
to secure to every man the greatest amount of liberty, 
and the bourgeois on the contrary demands that there 

1 The principal evil attending such laws is that they give rise 
to graft. In other words, our political machine actually favors 
such laws, because they put a club in the hands of the machine 
through which it can not only levy political contributions, but 
coerce their victims into support of the machine. 



MISREPRESENTATION AND IGNORANCE 33 

shall be the least amount of government consistent with 
the protection of property and life, the Anarchist asks 
that there shall be no government at all. The bourgeois, 
therefore, is closer to the Anarchist than the Socialist 
is — in fact he stands between the two. 

Socialists and Anarchists then are polar opposites. 
There is a whole world between them. Indeed it is 
impossible to conceive two theories of government more 
opposite one to another than that of Socialism, which 
demands more government, and that of Anarchism, which 
demands the destruction of government altogether. 



§ 2. Socialism is not Communism 

Those who derive their information regarding Socialism 
solely from books are apt to be puzzled by the word 
" Communism/ ' because it has at different times stood 
for different things. The early Christians were Com- 
munists; so were Plato and Sir Thomas More; so also 
was Proudhon, whom Mr. Roosevelt places in the same cat- 
egory with Karl Marx. He does not seem to be aware 
that Proudhon and Marx were the protagonists of con- 
flicting schools and that Marx drove Proudhon — who was 
a communistic Anarchist — and his followers out of the 
Socialist party of that day. For from Marx' economic 
doctrine of value was derived a totally new idea in the 
movement; this idea is couched in a formula which has 
become so familiar to Socialists that it seems incredible 
that anyone undertaking to write about Socialism should 
ignore it; namely, that the laboring class is entitled to 
the full product of its labor; that is to say, that it shall 
securely have exactly what it earns; no more, no less; 
that it shall be deprived of it neither by the capitalist as 



34 WHAT SOCIALISM IS NOT 

to-day nor by the thriftless or vicious as under the 
Communism of Apostolic times. 

Mr. Roosevelt accuses Socialists of " loose thinking." 
Is there not a little loose thinking about this confusion 
of Socialism and Communism? Or is it that Mr. Roosevelt 
is just a century behindhand? Or is it that he has never 
read the works of Proudhon and Karl Marx, whom he 
groups together as propounding the same kind of Social- 
ism? As a matter of fact, Proudhon has been so dis- 
credited by Marx that few Socialists think it worth while 
to read his works; whereas "Capital" is to-day the Bible 
of the Socialist movement. 

One word, however, must be added about Communism 
before dismissing the subject: There are two kinds of 
Communists, just as there are two kinds of Anarchists; 
those who adopt Communism and Anarchism out of 
discontent with the present system; and those who 
adopt them because they stand for perfection. With 
the first category we need not concern ourselves. Their 
day is over. With the second there is an important 
point to be noted : Such writers as Kropotkin see further 
than the average citizen. They look forward to a day 
when the spirit of mutual helpfulness which ought to 
attend the substitution of cooperation for competition 
will have entirely changed human nature; when men 
will have acquired habits of industry, of justice, and of 
self-restraint that seem now incredible to us; they will 
then as naturally work as they now naturally shirk; they 
will as naturally help one another as they now naturally 
fight; they will as naturally share with one another as 
they now despoil one another. This may seem wildly 
impossible to us now; but if we look back to the day 
when our forbears lived in hordes, when children bore their 
mother's name because they did not know their father's, 



MISREPRESENTATION AND IGNORANCE 35 

when no woman could move from her hut alone without 
being subject to assault, when self-indulgence prevailed ex- 
cept in so far as it was checked by fear, we can appreciate 
the scorn with which one of them would have listened 
to a prophet who should announce that men and women 
would ultimately mate once for all and be faithful to 
one another; children know their fathers and bear their 
father's name; women travel from one end of the country 
to another with perfect security, and self-restraint cease 
to be an imposition and become a habit. If then man 
has become so profoundly modified by the progress from 
the promiscuousness of the horde to the self-restraint 
of the family, why should he not be capable of one step 
further — from the habits that result from competition 
to the habits that would result from cooperation — from 
mutual hatred to mutual helpfulness? This is the hope 
and faith of such writers as Kropotkin. But it is not 
yet within the range of practical politics. So the Socialist 
party rightly confines its program within practical limits. 
There are too many idle and vicious among us to-day; 
too many products of human exploitation; too many 
worn-out men, women, and children; too much degenera- 
tion; too much hypocrisy; too much " looseness of 
thought." We must cut our garment to our customer. 
All that the Socialist asks to-day is to have what he earns. 
Morally he is entitled to it. Can our system of produc- 
tion be so modified as to assure this to him? This is the 
problem we have to solve. Socialists say that it can be 
so modified, or that it can, at least, be so modified 
as to put an end to pauperism, prostitution, and 
in great part to crime. This is the practical Social- 
ism of to-day as distinguished from the Communism 
of centuries ago or that of centuries ahead. This is 
what the Socialist party stands for, and it is by this 



36 WHAT SOCIALISM IS NOT 

standard and no other that the Socialist party must be 
judged. 

Socialism then does not stand to-day for Communism. 
On the contrary, it demands that the workers be assured, 
as exactly as is humanly possible, the product of their 
labor, and not share it with the idle and vicious on the 
one hand or be deprived of it by the capitalist on the other. 

One reason why Communism has been discarded by 
the Socialist party is that generations of competition 
have so molded human nature that it is extremely 
probable that production would suffer were it suddenly 
eliminated. A man who has accustomed himself to the 
stimulus of arsenic cannot be suddenly deprived of 
arsenic without developing the symptoms of arsenical 
poisoning. It will doubtless be indispensable to main- 
tain competition in the cooperative commonwealth. 
There is no longer question then of discarding competi- 
tion; the question is in what doses shall it be admin- 
istered; in doses that produce the pauperism and prostitu- 
tion of to-day, or in doses that will furnish the necessary 
stimulus for human exertion without pushing that stimulus 
to exhaustion and degeneracy? 

This question brings us to our next subject: 



§ 3. Socialism will not Suppress Competition 

No modern Socialist maintains that all competition 
is bad, or that it would be advisable to eliminate com- 
petition altogether from production and distribution. 
But it has become the duty of every sane man to consider 
whether it may not be possible to eliminate the excessive 
competition that gives rise to pauperism, prostitution, 
and crime. To answer this question, we must begin by 



MISREPRESENTATION AND IGNORANCE 37 

determining what competition is good and what bad; 
and if the bad can be eliminated and the good maintained. 

Competition is a part of the joy of life; healthy children 
race one another as they are let out from school; they 
challenge one another to wrestle and leap ; and when they 
are tired of emulation, they join hands and dance. Com- 
petition and cooperation are the salt and the sweet of 
life; we want the one with our meat and the other with 
our pudding; we do not want all salt or all sweet; for 
too much sweet cloys the mouth while too much salt 
embitters it. 

We all unconsciously recognize this by encouraging 
games and discouraging gambling. Now what is the 
difference between games and gambling? One is a whole- 
some use of time for the purpose of wholesome amuse- 
ment; the other is an unwholesome abuse of time for 
the purpose of making money. The one incidentally 
encourages a beneficial action of muscle and brain; the 
other, on the contrary, promotes a detrimental appetite 
for unlawful profit. 

We are all perfectly agreed about this so long as we 
confine ourselves to games and gambling; but as soon as 
we extend our argument to production and distribution 
we shall at once come into collision with the bourgeois. 
Let us therefore be very sure that our premises are sound 
and our deduction sure before we confront him. 

Even as regards gambling there are degrees of vice; 
some would justify old people who bet only just enough 
on the issue of a game of piquet to make it worth while 
to count the points; whereas all would condemn a bet 
that involved the entire fortune, much more the life 
or death of a human being. 

Now it may seem extravagant to assert that the com- 
petitive system of production imposes upon the majority 



38 WHAT SOCIALISM IS NOT 

a bet involving life or death, yet statistics demonstrate 
that mortality is from 35 to 50 per cent higher with those 
who lose than with those who win in the game of life. 1 
But it is not extravagant to assert that it imposes upon 
the majority a bet involving a thing quite as precious 
as life — I mean health. A man who bets his life and 
loses is free from pain on this earth at any rate; but the 
man who bets his health and loses is committed to a 
period of misery not only for himself, but for all those 
around him so long as breath is in his body. 

The greatest evil that attends the competitive system 
of production is that it commits all engaged in it to a 
game the stake of which is the life happiness not only 
of himself, but of all dependent on him. 

If this were a matter of mere sport there is not a man 
with a spark of moral sense in him who would not con- 
demn it. He would denounce it as a gladiatorial show; 
as belonging to the worst period of the worst empire 
known to history. But because it is a matter of pro- 
duction the bourgeois has for it no word save of justifica- 
tion and praise. He justifies it by the argument of 
necessity: "the poor you have with you always." He 
praises it because it "makes character." 

If there were indeed no other system of production 
possible but the competitive system, the plea of necessity 
would be justified. But when we are dealing with a 
question involving the happiness of the majority of our 

1 The death rate in 1900 among occupied males in the professions 
was 15.3 per 1000; in clerical and official classes 13.5; mercantile, 
12.1 ; laboring and servant classes 20.2 per 1000 (12th Census U. S.) 
Dr. Emmett Holt, writing in the Journal of the American Medical 
Association, points out the marked contrast between the death 
rate of the children of the poor and the children of the rich. See 
Appendix, p. 421. 



MISREPRESENTATION AND IGNORANCE 39 

fellow creatures, we must be very sure that there is no 
better system before the plea can be admitted. And as 
to those often misquoted words of Christ, there will un- 
doubtedly under the cooperative as well as the competitive 
system always be some shiftless, some poor. But every- 
thing depends on what is meant by the word "poor." 
To-day the poor are on the verge of starvation; poverty 
means not only misery, but disease and crime. Under a 
cooperative system there need be no starvation; no fear 
of starvation; less disease; and infinitely less crime! 
The vast majority of men do not need the lash to drive 
them to their work; it is no longer necessary to keep 
before us the fear of want, of misery, of starvation; we 
have passed that stage; and just as the lash is used by 
trainers only for wild beasts, and gentler animals are 
better trained by the hope of reward than by the fear 
of punishment, so humanity has reached a point of moral 
development which makes it no longer inferior to the 
lower animals — the bourgeois notwithstanding. Better 
work can be got from a man by the prospect of increased 
comfort than by the fear of misery and unemployment. 

As to the second justification, that the competitive 
system makes character; look for a moment at the 
character of the men who have succeeded in the competi- 
tive mill. Are these the saints of the latter day? Or 
are our saints not to be found amongst those who have 
never been in the competitive mill — who have resolutely 
kept out of it — Florence Nightingale, Father Damien, 
Rose Hawthorne, the Little Sisters of the Poor? 

The real problem is not whether we should or can 
eliminate competition altogether from the field of pro- 
duction, but whether we should or can eliminate it to 
the extent necessary to put an end to the three great 
curses of humanity to-day. 



40 WHAT SOCIALISM IS NOT 



§ 4. Socialism Will not Destroy the Home 

Mr. Roosevelt in his Outlook editorial 1 said of the 
" Socialists who teach their faith as both a creed and a 
party platform " that "they are and necessarily must 
be bitterly hostile to religion and morality/ ' that they 
" occupy in relation to morality and especially domestic 
morality a position so revolting — and I choose my words 
carefully — that it is difficult even to discuss it in a rep- 
utable paper.' ' 

When, however, he undertakes to substantiate this, 
he is obliged to admit that he cannot find any traces of 
it in American writers, and has to go to France and Eng- 
land for his examples. Had he been better informed, 
he would have known that not only is there no trace of 
immorality in our American Socialist press, but that 
there is one Socialist organ — the Christian Socialist — 
which has in the most vigorous terms denounced all those 
whose writings tend in any way to attack the fundamental 
principles of marriage. It is true that Christian Socialists 
in Mr. Roosevelt's opinion "deserve scant consideration 
at the hands of honest and clean-living men and women"; 
but he has not explained why. Nor has he ventured 
any explanation why Christian Socialists or any other 
Socialists should be "necessarily — bitterly hostile to 
religion and morality. " 

I must postpone to the chapter on the Ethical Aspect 
of Socialism 2 the explanation why Socialism, far from 
being "necessarily bitterly hostile to religion and moral- 
ity/' as Mr. Roosevelt maintains, is — on the contrary — 
the only form of society ever proposed which could make 
religion and morality possible. At the present time, it 

1 Outlook, March 20, 1909. 2 Book III, Chapter V. 



MISREPRESENTATION AND IGNORANCE 41 

seems sufficient to point out the obvious fallacy of Mr. 
Roosevelt's s3^11ogism. 

Here it is: 

Gabriel Deville wants to destroy the home. 

Gabriel Deville is a Socialist; 

Therefore: All Socialists want to destroy the home. 
The logic of this is bad enough, but even the premiss is 
false. Deville is no longer a Socialist; and if he does 
want to destroy the home, no one that I know of in 
America wants him back in the fold. 

In exactly the same manner our ex-Presidential logi- 
cian argues regarding divorce: 

Herron divorced; 

Herron is a Socialist; 

Therefore: All Socialists divorce. Herron was divorced 
in 1901. He is the only leading Socialist who has di- 
vorced during twenty years to Mr. Roosevelt's knowledge 
or to mine. Whereas, during that time here are the 
statistics of divorces for the United States: 

Total number of marriages 1887-1906, 12,832,044 

Total number of divorces 1887-1906, 945,625 
or about one in 12, * in all of which the majority of the 
men presumably voted for Mr. Roosevelt. 

Can anyone who knows the family life of Socialists 
assert that the divorce rate among them is greater than 
that of the community in which they live? 

Again, the pretence that the American home to-day 
is one w T hich a capitalist like Mr. Roosevelt can hold up 
to the admiration of the world will not stand scrutiny. 

Where there is wealth for leisure, there we find im- 
morality enthroned as a vice; and where there is no 
leisure, there w r e find immorality imposed as a necessity. 
Are the filthy tenements and promiscuous lodgings of 

1 U. S. Census Bulletin 96, p. 7, 12. 



42 WHAT SOCIALISM IS NOT 

the congested districts in our large cities the homes to 
which Mr. Roosevelt is fearful that Socialism will put 
an end? l Or is it the so-called She-towns in New England 
from which men are driven because there is no employ- 
ment in them for any save women and children? 2 Or 
the lumber camps to which these men are driven where 
there is no employment for women? 3 Or the home of the 
unemployed to which the bread-winner has returned day 
after day for two years now, seeking employment and 
finding none — guilty of no crime save that no man has 
hired him? Thousands — nay, hundreds of thousandsof such 
so-called homes are scattered over the face of this land 
which Mr. Roosevelt has during seven years administered. 
As a matter of fact, no decent home is possible for 
the majority of our fellow citizens so long as they are 
called upon to support it at present prices on present 
wages. All this will, I think, be made clear in the de- 
scription of industrial conditions. Suffice it to say here 
that these conditions furnish a few luxurious and often 
licentious homes for the propertied class and a few com- 
fortable and moral homes for the aristocracy of the 
working class, but leave a vast number of our families so 
nearly upon the edge of poverty as to drive their daugh- 
ters to prostitution and their sons to crime. 

§ 5. Socialism Will not Abolish Property 

Another charge made by Mr. Roosevelt is that Socialists 
propose to abolish property and distribute wealth. It 
has been repeated by both Mr. Taft and Mr. Bryan and 
is still being repeated ad nauseam by the press. Work- 

1 "Poverty," by Robert Hunter. (Macmillan.) 

2 "Socialism and Social Reform," by R. T. Ely, p. 43. (Crowell.) 

3 Ibid. 



MISREPRESENTATION AND IGNORANCE 43 

mgmen so absorbed by the making of bread that they 
have no time to discuss questions of government may 
be excused for being ignorant on such a point as this; 
to them ignorance cannot be imputed as a fault. But 
that those who set themselves up as the persons best 
fitted to govern and educate our country — as indeed the 
only persons in the country possessing the knowledge 
of statesmanship necessary to handle our governmental 
affairs and publish our daily press — should either never 
have taken the trouble to find out what Socialism is, or, 
having taken the trouble, should so traduce it, is a sad . 
commentary upon our editors and statesmen. 

Just as it has been demonstrated that Socialism is 
opposed to Anarchism, so can it be demonstrated that 
Socialism is opposed to the distribution of wealth or the 
abolition of property. Far from distributing wealth, 
the essence of Socialism is that it seeks to concentrate 
it. Far from wanting to abolish property Socialism 
seeks to put it on a throne. The question of property 
is so important that a special chapter has been devoted 
to it. I shall therefore only say here just enough tore- 
move the error created by the misstatements current 
on the subject. 

Property is not only the basis of our present civiliza- 
tion, but must be the basis of all conceivable civilizations. 
It may be said that not only all law, but all government, 
is founded upon it. Property was instituted to furnish 
to every industrious man security as regards himself, 
his family, and the means of their support; to protect 
him and them from theft, from fraud and evil doing. 

Unfortunately property, like every human institution 
— even the best of them l — has been abused to serve 

^'Government or Human Evolution/ ' Vol. II, p. 88 et seq., by 
the author. 



44 WHAT SOCIALISM IS NOT 

the selfisnness of the crafty; and there have arisen, 
therefore, notions and laws regarding property which 
have reversed the results which property was instituted 
to secure. Instead of making every industrious man 
secure as regards himself, his family, and the means of 
their support, it has actually deprived the majority of 
all security regarding these things and, indeed, put the 
majority as regards these things at the mercy of a very 
few. Not only this, it has created conditions which 
to-day are depriving several millions of us not only of 
all means of support, but of all opportunity of earning 
them. 

The bourgeois' excuse for such conditions is that no 
better can be devised. Here is the whole issue of Social- 
ism raised; for Socialism contends that these condi- 
tions are totally unnecessary; that it does not need 
any imagination or invention to substitute for them a 
system that will put an end to such evils as pauperism, 
prostitution, and, in great part, crime; that we have 
but to adopt as a community the principles already 
adopted by the men — the makers of the trusts — to 
whom the whole business world looks up as infallible on 
these subjects; and that this can be accomplished by 
ridding the institution of property of the fallacies with 
which it has been industriously defaced. Just indeed 
as the truly religious have during all ages sought to 
rescue religion from the crafty who tend to use it for 
their own ends — Christ from the Pharisee, Plato from the 
Sophist, Luther from the Borgias, so Socialists are now 
seeking to rescue property from the few who, under a 
mistaken theory of happiness, use property to injure 
their fellow creatures when these very few can attain 
happiness only by so using property as to benefit those 
they now injure. 



MISREPRESENTATION AND IGNORANCE 45 

It must, however, be specifically stated that Socialism 
does not involve the concentration of all wealth in the 
state. No sane Socialist proposes to vest in the state 
the things which a man uses, his personal apparel, his 
personal furniture, his objects of art, his musical instru- 
ments, his automobile, or even his private yacht. 

There is no intention to suppress private property 
except so far as it is used for exploitation. Light is 
thrown upon this subject in another paragraph, which 
indicts the capitalist system for making the production 
of the necessaries of our lives the object of their com- 
petitive enterprises and speculations. 

What the Socialist party proposes to do is not to abolish 
property, but to abolish the capitalist system, as it ex- 
pressly states; and it proposes to do this not only in the 
interest of the proletariat, but also in the interest of the 
capitalist himself, who, to quote the words of the plat- 
form, is "the slave of his wealth rather than its master." 
The extent to which this last is true will be discussed in 
a subsequent chapter and ought to constitute an im- 
pressive argument for all — even millionaires — who have 
become the slaves of the very fortunes they have made. 
And the moral tendency to restore property to its original 
intention by abolishing the capitalist system is expressly 
stated in the platform as not an attempt "to substitute 
working-class rule for capitalist-class rule, but to free all 
humanity from class rule and to realize the international 
brotherhood of man." If this be immoral, then a great 
many of us do not know what morality is. 

Nor does it propose to vest in the state anything but 
what it is indispensable for a state to own in order to 
rescue the un wealthy majority from the exploitation 
of the wealthy few. Nothing is more false or libelous 
than the allegation that Socialism proposes to destroy 



46 WHAT SOCIALISM IS NOT 

property, or to deprive a man of the benefit of his talents, 
or of the enjoyment of the products of his work. It 
is the present industrial system that deprives the majority 
of the product of their work. Socialism aims at the 
opposite of these things. What Socialism does propose 
is to preserve wealth by eliminating waste and to ensure 
to all men the fullest benefit of their talents and the enjoy- 
ment of the whole product of their work. It does not 
propose to level down, as is so often claimed; the necessary 
effect of Socialism is to level up, if indeed it levels at all. 
The extent to which it may be wise to concentrate 
wealth in the state, or whether it is necessary to con- 
centrate it in the state at all, is a question which must 
be postponed until we have a clear idea of what Social- 
ism is. 

Meanwhile I venture to suggest one view of Socialism 
which, although it does not attempt to define it, may help 
us as a first effort to get a correct apprehension of it. 

Socialism is the concentration of just so much wealth 
in the community — please note that I do not say " state" 
— as may be necessary to secure the liberty and the hap- 
piness of every man, woman, and child consistent with 
the liberty and the happiness of every other man, 
woman, and child. 

We are obviously here brought to the question of 
what is liberty, and to the discussion of another error 
regarding Socialism upon which the bourgeois is disposed 
to insist, viz.: Socialism will impair liberty. 

§ 6. Socialism Will not Impair Liberty 

The same thing must be said of liberty as of property: 
both are such important subjects that they demand a 
chapter to themselves. But there are current errors 



MISREPRESENTATION AND IGNORANCE 47 

about liberty which, when removed, will prepare the 
mind for the undoubted fact that Socialism, far from 
impairing liberty, will greatly enlarge it. 

When negro slavery existed people thought that if 
slavery were only abolished, liberty would be secured. 
It was found, however, that when negro slavery was 
abolished there was still another liberty to be secured — 
political liberty. 

Now that we have secured the constitutional right and 
the constitutional weapon by which political liberty 
ought to be attained, we discover that these rights and 
weapons are useless to us so long as the immense majority 
of us are still economic slaves. 

Let us consider for a moment just what is meant by 
an economic slave. 

An economic slave is a man who is dependent for his 
living on another man or class of men and who, because 
all his waking hours and all his vitality must be devoted 
to making a living, has no leisure either to exercise his 
political rights or to enjoy himself. 

It may seem exorbitant to say that the " immense 
majority" of us are economic slaves, yet a very little con- 
sideration will, I think, convince that we are. 

Workingmen are dependent on their employers under 
conditions worse than negro slavery. For a slave owner 
had an interest in the life of his slave just as a farmer 
has an interest in the life of his stock. He therefore fed 
his slaves and did not overwork them. Nor was a slave 
subject to losing his job. The factory owner, on the 
contrary, not being the owner of his factory hands, is 
free to dismiss them as soon as they are worn out, and it 
is to his interest, by speeding up his machinery, to get 
the most work out of his hands possible, regardless 
whether he is overworking them; for as soon as they 



48 WHAT SOCIALISM IS NOT 

show signs of overwork he has but to dismiss them and 
employ a younger generation. Nor can it be said of 
workingmen that they have leisure for education, politics, 
or enjoyment. Now the last census shows that our 
industrial population numbers 21,000,000. 

In the second place, the farmer works himself as hard — 
if not harder — than the factory owner works his factory 
hand. He is driven by the same necessity as the factory 
owner — the necessity of making money. 1 There are of 
course a few large farmers who own enough land to 
work it as the factory owner works his factory — by the 
use of machinery and men. But these are few, and it 
is the extraordinary economy that these men make in 
working their farms that obliges the small farmer to 
work night as well as day to make a bare living out of 
his land. Now by the last census the farming popula- 
tion in the United States numbers 30,000,000. 

And what has been said of the workingman is true 
of the clerk and domestic; and what has been said of 
the small farmer is true of the small tradesman. Now 
clerks, domestics, and tradesmen number 30,000,000. 
Summing up we have: 

Industrial population 21,000,000 

Farmers 30,000,000 

Clerks, domestics and tradesmen 30,000,000 



81,000,000 



out of a total population of 90,000,000 are economic 
slaves. 

And of the 9,000,000 that remain, how many are 
economically free? 

1 "The American Farmer," A. M. Simons. 



MISREPRESENTATION AND IGNORANCE 49 

These are in part teachers, physicians, and lawyers. 
I leave it to teachers to tell us how much time they can 
call their own. As to the rest, it is the dream of a young 
doctor to get a large practice; and when his dream is 
realized, how much leisure does he enjoy? He is at the 
mercy of his practice, not only weekdays, but Sundays — 
days and nights. He is the slave of his own practice. 
It is the dream of the young lawyer to get rich clients 
and handle big cases. When he gets them, he discovers 
that he must have an office that costs between $30,000 
and $50,000 a year to take care of them, and that he must 
earn these large sums before there is a penny left for 
himself. So he too is the slave of his own office. 

But further than this: Our great business men — 
amongst them the very greatest — I have seen with my 
own eyes slowly sink under the burden of the very in- 
stitutions their own genius had created. They too have 
become the slaves of their own creations. 

So we are all slaves, the greatest and the least of us, 
with exceptions so few that they are hardly worth men- 
tioning. And how do these exceptions use their leisure? 
It were better not too closely to inquire. Too much 
leisure is as detrimental to happiness and progress as too 
much work. The enormous increase of lunacy in late 
years is a straw that shows how the stream runs. Because 
of too much work or too much leisure the race is march- 
ing with fatal speed toward general prostration of nerve, 
of body, and of mind. 

Whether then we look at this question from the point 
of view of human progress or of human happiness, it 
seems indispensable that the whole machinery of pro- 
duction be speeded down a little instead of continuously 
up. Now this is what Socialism proposes to do: It 
proposes by the substitution of cooperation for com- 



50 WHAT SOCIALISM IS NOT 

petition to make the same economy for all humanity 
as trust promoters have made for themselves. And 
the economy will be an economy of time. We shall work 
as hard while we are working, but we shall work four 
hours instead of eight and twelve. And the rest of the 
time we shall have to ourselves; we shall be economically 
free. 

Yet if the reader has in his mind any such idea of 
Socialism as Mr. Roosevelt's " state free lunch counter/' 
resulting in an " iron despotism over all workers compared 
to which any slave system of the past would seem benef- 
icent because less utterly hopeless" — he will be disposed 
to condemn in advance any economic freedom purchased 
at such a price. I beg the reader, therefore, to try to 
rid his mind of the prejudice created by such views as 
Mr. Roosevelt's until he has read the chapters on the 
Economy of Socialism and How Socialism May Gome. 
If in these chapters the errors of Mr. Roosevelt's notions 
are not dissipated, then this book will have been written 
in vain. 

One thing more, however, must be said on this subject. 
Inexcusable though Mr. Roosevelt may be in most of 
his attacks on Socialism, it must be admitted that the 
"iron despotism" to which he thinks Socialism will 
lead is justified by many Socialist authors, and it is 
only very lately that a way has been found for introduc- 
ing cooperation without compulsion. Again, Mr. Roose- 
velt is in good company in making this charge. It is 
the great cheval de bataille of every anti-Socialist. 

In " A Plea for Liberty," edited by Herbert Spencer, the 
idea of concentrating wealth in the community is de- 
nounced as a "conception of life or conduct" which 
would compel men "to rise at morn to the sound of a 
state gong, breakfast off state viands, labor by time 



MISREPRESENTATION AND IGNORANCE 51 

according to a state clock, dine at a state table supplied 
at the state's expense, and to be regulated as to rest and 
recreation. " 

In fact, Socialism proposes none of these things. But 
if it did, a factor}' hand might very well ask whether 
such a conception of life or conduct would be worse 
than to rise at mom by the sound of a factory bell, labor 
by time according to a factory clock, neither breakfast 
nor dine at a factory table supplied at the factory's 
expense, but be regulated as to rest and recreation by 
factory rules. When we come to discuss liberty, we shall 
be in a position to compare the liberty enjoyed under 
Socialism with the liberty enjoyed to-day. 

In the chapter on Property and Liberty, the subject 
of liberty is carefully anatyzed; no more, therefore, need 
be said on this subject except in conclusion to insist 
that it is the competitive system of to-day that makes 
slaves of practically all of us, and that it is the cooperative 
sj'stem alone that will secure for us the last and greatest 
of all the liberties — economic liberty — because it is 
economic liberty alone that will enable us to enjoy the 
other two. 

§ 7. Conclusion 

Having now chipped off some but not all of the errors 
that prevail regarding Socialism, let us sum up what 
Socialism is not ; it will help us to a study of what Social- 
ism is. 

Socialism is not Anarchism, It is the contradictory 

opposite of Anarchism. It believes in regulation, but 

demands that the regulation be wise and just. 

Socialism is not Communism. On the contrary 

it demands that workingmen be assured as nearly 

as possible the product of their labor. 



52 WHAT SOCIALISM IS NOT 

Socialism does not propose to eliminate competition, 
but only to abolish excessive competition that gives 
rise to pauperism, prostitution and crime. 

Socialism is not hostile to the home. On the con- 
trary, it seeks to remove the evils that make the homes 
of our millions insupportable. 

Socialism is not immoral. On the contrary, it seeks 
to make the Golden Rule practical. 

Socialism does not propose to abolish property or 
distribute wealth. It proposes, on the contrary, to 
consecrate property and concentrate wealth so that 
all shall enjoy according to their deserts the benefits 
of both. 

Socialism will not impair liberty. On the contrary, 
it will for the first time give to humanity economic 
liberty without which so-called individual and political 
liberty are fruitless. It proposes to regulate produc- 
tion, consecrate property, and concentrate wealth only 
to the extent necessary to assure to every man the 
maximum of security and the maximum of leisure; 
thereby putting an end to pauperism, prostitution, and 
in great part, to crime, and furnishing to man en- 
vironment most conducive to his advancement and 
happiness. 

Whether it will accomplish these things can only 
be determined by approaching it from the positive 
side. We shall proceed next then to answer the ques- 
tion what Capitalism is. 



BOOK II 
WHAT CAPITALISM IS 



Socialism is necessarily twofold: destructive and 
constructive; critical and remedial. We shall take the 
critical or destructive role of Socialism first; setting down 
the evils in our existing industrial system which Social- 
ism criticizes and seeks to destroy, and leaving the re- 
medial or constructive role of Socialism where it properly 
belongs — to the end. For this reason the present book, 
which treats of the evils of the existing industrial system, 
is entitled "What Capitalism is.'! 

Evils of Capitalism 

For nearly two centuries men have produced and 
distributed the things they needed, upon what is called 
"the competitive system/ 7 That is to say, every in- 
dividual is free to choose his particular share in this 
work and to make out of his work all that he can, in 
order with the money so made to purchase for himself 
the things that he individually needs. The farmer 
undertakes to furnish us with food, the forester with 
lumber, the miner with iron. Another set of men run 
railroads, steamboats, wagons, etc., to distribute the 

S3 



54 WHAT CAPITALISM IS 

things produced to those who are engaged in selling 
them — by wholesale to the trade, or by retail to the 
consumer. Every man engaged in production and 
distribution is in a measure competing with every other 
man engaged in it, each trying to make out of his par- 
ticular calling the largest amount of money possible 
with the view of being able with the money so earned 
to purchase for himself the largest amount of necessaries, 
comforts, and luxuries. This so-called competitive sys- 
tem has been elaborately described by all writers of 
political economy from de Quesnay and Adam Smith, 
the fathers of our present system of political economy, 
to the present day; and because it follows the predatory 
plan of nature (by which one set of animals lives by 
devouring another set), it is claimed by some so-called 
philosophers to be "natural" and therefore wise. The 
most notorious author of this so-called scientific justifica- 
tion of the competitive system is Herbert Spencer. 

The competitive system, however, has been found to 
result in great waste, misery, and disease; and it is to 
these evil consequences that the Socialist desires to put 
an end. He claims that the competitive system is not 
wise, not scientific, and above all, not economical, but 
is the most wasteful system conceivable. He alleges 
that the only intelligent, economic way of producing 
and distributing the things we need is by cooperation; 
and the whole economic issue between Socialism and 
our present industrial system is that Socialism stands 
for cooperation, and our present system for competition. 

It is by no means a necessary part of Socialist philos- 
ophy that competition be entirely eliminated. On the 
contrary, it has been pointed out and will later be further 
seen that competition has many useful qualities. 1 Social- 

1 See Book I, Chapter III. 



WHAT CAPITALISM IS 55 

ism, however, points out that competition, when allowed 
full sway in producing and distributing the necessaries 
of life, is the direct occasion of the larger part of the 
misery in the world, and insists, therefore, that as re- 
gards production and distribution of the necessaries of life, 
competition be sufficiently eliminated to assure to all 
men the opportunity to work, and as nearly as possible 
the full product of their work. The limitation in italics 
is the definite dose to which reference has already been 
made. 1 

One prominent feature of the competitive system is 
that men do not work for the purpose of supplying the 
needs of their fellow creatures. The Steel Trust does 
not manufacture steel to satisfy our need for steel; the 
farmer does not raise wheat to satisfy our need for bread; 
they produce these things simply for the purpose of mak- 
ing money for themselves in order that with this money 
they can procure for themselves the things they need. 
Socialism claims that the role played by money in the 
competitive system is unfortunate, because the amount 
of money available at any given time is not always 
properly adjusted. Sometimes it is so badly adjusted 
that there is more cotton in one place than the people 
in that place can use, and in another more people who 
need cotton than there is cotton to give them; so that 
it is deliberately proposed to burn cotton for lack of 
consumers in one place, while consumers are allowed to 
suffer for lack of cotton in the other. So a short time 
ago thousands were dying of starvation for lack of wheat 
in India, while we had such a superbundance of it in 
America that we were exporting it every day. But that 
wheat was not available for India because it had to be 
converted into money. 

1 See Book I, Chapter III. 



56 WHAT CAPITALISM IS 

Socialists allege that this bad situation would never 
arise if things were produced for the purpose of satisfying 
human needs instead of for making money. 

Let us enumerate some of the most important evils 
of the competitive system, which Socialism seeks to 
correct. These evils briefly are: The competitive system 
is stupid because wasteful and disorderly; it is unnec^ 
essarily immoral, unjust and cruel. 



CHAPTER I 
CAPITALISM IS STUPID 

§ 1. Overproduction 

The first and most glaring evil of the competitive 
system is that it is stupid. In support of this I shall 
call as witnesses captains of industry whom the business 
men regard as the greatest authorities in the world: 
John D. Rockefeller 1 , Henry O. Havemeyer 2 , Elbert H. 
Gary 3 and others. 

Socialists are accused of being impractical. I shall 
have failed in properly presenting the Socialist case if 
I do not succeed in demonstrating that the impractical 
people are the bourgeois, the Roosevelts, Tafts and Bryans 
who, though aware of the waste of the competitive sys- 
tem, insist upon maintaining it; and that the only prac- 
tical people are those who, like the Socialists, having 
perceived the waste that attends the competitive system, 
seek to replace it by a more economic plan. 

1 Industrial Commission Report, Vol. I, p. 794. 

2 Ibid., p. 101. 

3 Ibid., p. 982. 

The results of the work of this Commission are well summed up 
in Ind. Com. Rep., Vol. I, Pt. I, p. 39, by Professor Jenks; and the 
waste eliminated by trusts still more compendiously treated in 
"Government," Vol. II, p. 543, by the author. 

57 



58 WHAT CAPITALISM IS 

No one will, I think, deny that the most practical 
business men to-day in America are Rockefeller, Pierpont 
Morgan, Havemeyer, and the others who have been 
engaged in organizing our great trusts. Now the only 
object of a trust is to eliminate the unnecessary waste- 
of competition; and the only difference between the 
Socialist and the trust magnate is that the Socialist 
wants the benefit derived from reducing competition 
to be shared by all; whereas Rockefeller, Pierpont 
Morgan and the other trust magnates want the profit 
secured by the elimination of waste all to them- 
selves. 

I do not suppose there is any man living so prejudiced 
or so dull as to deny that, if Socialism could present a 
system by which all could be made to profit from the 
elimination of the waste of the competitive system in 
such a manner that the profit of each shall be propor- 
tional to the amount which each contributes, Socialism 
would be justified. The only point upon which there 
can be discussion is whether it is possible to suggest a 
workable plan under which the evils of competition can 
be eliminated, and the blessings of cooperation take 
their place. In other words, is cooperation a practical 
cure for competition? It is obviously impossible to 
decide whether a given treatment would constitute a 
cure for a given disease, without a thorough knowledge 
of the disease. It is therefore essential that we should 
be clear as regards the defects of the competitive system, 
and how far these defects are curable and how far 
incurable. 

The beauty of the competitive system upon which 
the bourgeois loves to dwell is that it is automatic; 
whenever there is overproduction in an industry prices 
fall, profits disappear and therefore capital flows away 



CAPITALISM IS STUPID 59 

from it; as soon as overproduction comes to an end 
prices rise, profits reappear and capital flows back to it. 
And the beauty of this automatic system is the more 
commended because it closely follows Nature; and 
indeed, the system of Nature is beautiful in the ex- 
treme. The sun draws the vapor of pure water from 
the salt ocean; lifts it high into the air, wafts it by 
propitious breezes to the continent; sheds it in benefi- 
cent rain upon the thirsty land, and deposits it in 
gigantic reservoirs of ice and snow upon our mountain 
heights; there is the supply upon which during hot 
summers we depend; and the hotter the summer, and 
the more therefore we need moisture, the more the 
snow and glaciers melt and furnish us with torrents 
of refreshing streams; so that at last the vapor that 
has been drawn by the sun from the ocean, in obedience 
to the inevitable law of gravitation, returns to it in a 
thousand rivers, after having performed its function 
of nutrition and refreshment on the way. 

In the same fashion demand is ever beckoning labor 
and capital to seek new fields, tempting them from the 
low levels of low interest to high levels of high profit; 
and supply, increasing through their efforts, is forever 
bringing them back, like the force of gravitation, to the 
point whence they started; and the cycle is repeated 
over and over again, performing its mission of production 
and distribution on the way. 

Unfortunately, Nature, though beneficial in the main, 
does not accomplish its work without distressing inci- 
dents. Breezes are not always propitious; they some- 
times create disastrous havoc; torrents are sometimes 
more than refreshing, and summers unduly hot. 

For example, the more abundant a crop is, the more 
prosperous the country which grows the crop ought 



60 WHAT CAPITALISM IS 

to that extent to be; but it sometimes happens tnat, in 
such case, prices fall so low as to bring disaster to those 
who have grown it. 1 

Nature is not always to be depended on. Occa- 
sionally a crop entirely fails, and when this happens, as 
lately in India, millions are exposed to starvation and 
thousands actually starve. 

Even when Nature is most bountiful the competitive 
system results in misfortune. For example, the Presi- 
dent of the Boston Chamber of Commerce in a speech 
to the Chamber said in 1891: 

"In 1890 we harvested a cotton crop of over eight 
million bales — several hundred thousand bales more 
than the world could consume. Had the crop of the 
present year been equally large, it would have been an 
appalling calamity to the section of our country that 
devotes so large a portion of its labor and capital to the 
raising of cotton/' 2 

In 1905 the newspapers announced "the South is 
proposing to burn cotton so as to keep up its price." 1 
And still more recently the same suggestion has been 
made regarding the tobacco crop in Kentucky. 

Again, the competitive system under which every 
man goes into the business where he sees most profit, 
inevitably leads to periods of overproduction, and over- 
production leads to unemployment and misery. 

No political economist denies the obvious fact that 
whenever an industry is known to be profitable, capital- 
ists are likely to engage in this industry — indeed, this is 
one of the automatic processes which the Manchester 

1 See N. Y. Tribune, Jan. 1, 1905, p. 2, column 2. Ibid., Jan. 2, 
1905, p. 11, column 1. 

2 " Socialism and Social Reform," by R. T. Ely, p. 134. 



CAPITALISM IS STUPID 61 

school has put forward as constituting the chief merit 
of the system. It is, of course, important for the com- 
munity at large that prices should in no one industry 
become excessive; and obviously the disposition of 
capital to rush into industries where profits are high, 
does by competition tend to reduce prices, and thus 
prevent them from becoming excessive. But econo- 
mists, especially those of the Manchester school, have not 
been willing to recognize that this disposition of capital 
to flow into productive enterprises may, though some- 
times beneficial, be also sometimes ruinous; may, indeed, 
often result in a devastating deluge. These economists, 
therefore, it may be well to confront with a brief history 
of one or two of our largest combinations. Let us take 
as a first example the sugar trust. 

Just before the organization of this trust, overpro- 
duction had become so excessive that of forty refiners 
in the United States eighteen became bankrupt. Of 
the twenty-two that remained, eighteen combined. Of 
the refineries belonging to these eighteen, eleven were 
closed, leaving seven to do profitably the work which 
had previously been done unprofitably by forty. 

The history of the whisky trust shows overproduction 
to a still more aggravated degree. Before the organiza- 
tion of the Distilling and Cattle-Feeding Company, 
agreements were entered into by the majority of the 
distillers; under one of them they agreed to reduce pro- 
duction to forty per cent of what it at that time was; 
subsequently they agreed to reduce still further to 
twenty-eight per cent; and of eighty of the principal 
distillers who organized the Distilling and Cattle-Feeding 
Company, the establishments of sixty-eight were closed, 
leaving only twelve distilleries operating. 

The same succession of events is found in the history 



62 WHAT CAPITALISM IS 

of the American Steel and Wire Company, and indeed of 
practically all American trusts. 

This inevitable tendency towards overproduction 
vitally concerns workingmen, for it is upon them that 
the evil consequences of this process first and most 
fatally fall. As soon as the process results in the in- 
evitable reduction of prices to near cost, the manufac- 
turer must either throw workmen out of employment 
or reduce wages. Wages constitute the only elastic 
element in cost, and it is therefore the workingman who 
first pays for the evil working of this system. And not 
only does the workingman pay for it, but the employer 
pays for it also; for workingmen, to protect their interests, 
strike, and only the wealthiest employers can stand the 
strain of a strike; the rest are ruined by it. 

Even a reduction of the hours of work or the days of 
employment in the week will, if it lasts long enough, 
ruin the employer, for he has still to pay the fixed 
charges of the factory, and if prices get low enough, and he 
cannot sell his goods except at a ruinous loss, he ends 
by not having means to pay these charges; and this 
process is illustrated in the cases just mentioned; for 
example, eighteen out of forty sugar refiners became 
bankrupt; and it was not till the eighteen were ruined 
that a combination was possible amongst the rest. 

One method employed by trusts to keep up prices 
at home is to sell their excess of goods in foreign markets 
at prices below cost. 

Mr. Gary, President of the Federal Steel Company, 
testified before the Industrial Committee that steel 
had been recently shipped to Japan at a price below 
the domestic price. 1 

Mr. J. W. Lee, President of the three independent 

1 Report of the Industrial Commission, 1900. Vol. I, p. 199. 



CAPITALISM IS STUPID 63 

pipe-line organizations, testified that prior to 1895 "oil 
for export was sold below the cost of crude at the re- 
finery." x 

Again, at a time when the American trade was paying 
$28 for steel rails, the same steel rails were sold in Japan 
at $20. 2 

Obviously, the nations who are the victims of this 
process are not long going to tolerate it; but this is a 
relatively small part of the international complications 
produced by overproduction. The most serious con- 
sequence of overproduction is that manufacturers, when 
they can no longer get a remunerative price for their 
goods in the home markets, are inevitably driven to 
seek it elsewhere. They seek foreign markets, and 
failing foreign markets, they seek new markets by 
colonization or conquest. 

It is impossible to read the history of the British 
Empire during the last 150 years without becoming 
persuaded that its so-called greed for conquest inevitably 
results from the necessity under which English manu- 
facturers have been to secure markets for their increasing 
goods. Either British factories had to close, and British 
workmen to be thrown out of employment, or England 
must, by colonization or conquest, secure a price outside 
her own borders for the goods which competition per- 
petually tended to make her factories overproduce. 

Indeed, the war through which England compelled 
China to purchase Indian opium looks like the greatest 
of international crimes; yet, when we understand this 
so-called crime of England, it turns out to have been a 
commercial necessity; for the remunerative prices ob- 
tained by the production of opium in India had so 

1 Report of the Industrial Commission, Vol. I, 1900, p. 121. 

2 Monde Economique, Feb. 20, 1897. 



64 WHAT CAPITALISM IS 

developed this branch of business that millions of Indians 
depended for their lives upon it, and either Chinese must 
poison themselves with opium, or Indians must die of 
hunger. The responsibilities of England were to her 
subjects first. The Chinese had to pay the price of thi& 
responsibility. 

No better illustration of the wicked despotism that 
results from existing industrial conditions could be 
given than this; it brought about a condition of things 
under which England must commit a crime against China, 
or millions of her subjects must perish in Hindustan. 

The millions that would starve in India if the opium 
market were suddenly closed remind us of the millions 
who are on the verge of starvation here in the United 
States, 1 and have been for two years past because of 
inherent and incurable defects in our industrial system. 
It is no answer to say that the evil results of overpro- 
duction are promptly remedied by the fluidity of capital 
to flow towards profitable and to withdraw from un- 
profitable manufactures. Every time such withdrawal 
takes place a corresponding number of workmen are 
thrown out of employment, are subjected to want and 
anguish of anxiety. The evil of this system cannot be 
explained away by pointing out that the capital with- 
drawn from one manufacture will soon be reinvested in 
another. A cotton-spinner cannot in a week or a month 
become a boilermaker. The commercial system which 
makes it easy for a capitalist to maintain income at cost 
of agony to the workingman does not recommend itself 
to the political student seeking the establishment of 
Justice in economic conditions. For, unfortunately, 
labor is not as " fluid " or insensible as capital. The work- 
ingman is a human being with the capacity for pain and 

1 July 19, 1909. 



CAPITALISM IS STUPID 65 

anxiety that characterizes our race; and every time 
that capital profits by its fluidity to flow from one in- 
dustry to another, the lives of men, women, and children 
are threatened by want. Even in prosperous times 
memories of the last panic and the certainty of a re- 
curring panic keep their hearts haunted by fear. 

Overproduction is by no means the only cause for 
these periods of unemployment. Indeed, the panic of 
1907 was not the result of overproduction, but of over- 
investment, or what the French call the " immobiliza- 
tion of capital/ 7 Every nation has two very different 
uses for wealth: one for keeping its population alive 
and comfortable, the other for developing the resources 
of the country, e.g., building roads and railroads, ex- 
ploiting mines and quarries, etc. If too much wealth 
is immobilized in the latter, there is not enough for the 
former. The important function of regulating this 
matter is in the hands of bankers who make money not 
only out of the prosperity of prosperous times, but out of 
the panic of panic periods. .Thus in May, 1907, the 
bankers, knowing that there had been overinvestment, 
took care of themselves by selling securities at top- 
notch prices, occasioning what was called the "rich 
man's panic," because the rich men of leisure were its 
victims; so that when the poor man's panic came in 
October and stocks tumbled to one-half of May prices, the 
bankers were able to reinvest the proceeds of May sales 
at fifty per cent profit. One of the consequences of this 
operation was that in October, 1907, neither manu- 
facturers nor railroad men could get money to keep their 
work going; gangs of five thousand men at a time were 
summarily dismissed by railroads, and manufactures 
shut down. 

Of course, the bankers did not "make the panic," as 



66 WHAT CAPITALISM IS 

has been sometimes ignorantly asserted; they only 
made money out of it both ways — out of high prices in 
May and out of low prices in November. And this 
illustrates one of the great defects of the competitive 
system — that it puts different sets of men in a position 
where they can make individual profit out of the mis- 
fortunes of their neighbors; bankers out of panics; dis- 
tillers and liquor dealers out of drunkenness; manufac- 
turers and retailers out of adulteration, and so down the 
whole gamut of production and distribution; and this is 
the process which the bourgeois approves because it 
" makes character/' 

But the unemployment that is the necessary result 
of all periods of depression, whether produced by over- 
production or overinvestment, deserves more than 
passing mention for its fruits in the shape of misery, 
pauperism, prostitution and crime, are menacing and 
prejudicial to the race. 

§ 2. Unemployment 

The subject of Unemployment has just been treated 
by an expert in a book * hailed by the press as the final 
word on the subject. All the theories ever propounded 
as to the cause of unemployment have been reviewed 
in this book, from overproduction, underconsumption, 
competition, to " spots on the sun." And the author 
concludes in favor of competition. 2 As regards the facts 
and the explanation of these facts, there seems to be no 
essential disagreement between orthodox economists and 
Socialists. Both trace unemployment back to competi- 

1 "Unemployment: A Problem of Industry/' by W. H. Beveridge 
and others. (Longmans.) 

2 Ibid., p. 61. 



CAPITALISM IS STUPID 67 

tion. And in addition to the arguments given by Mr. 
Beveridge for tracing unemployment to competition, I 
venture to add that competition must be decided to be 
the primary cause, because it is itself the cause of the other 
so-called causes occasionally proposed — overproduction, 
underconsumption, underemployment, underpayment — 
in fact, all except " spots on the sun," which can, I think, 
except for purposes of hilarity be definitely abandoned. 

But although we are agreed as to facts, we very much 
differ as to emphasis. Mr. Beveridge, and indeed all 
orthodox economists, pass lightly over the injustice, the 
immorality and the agony of unemployment. He refers 
to the "cyclical fluctuation" which gives rise to unem- 
ployment as a mere failure of adjustment between 
demand and supply. "No doubt," he says, "the ad- 
justment takes time and may only x be accomplished 
with a certain amount of friction and loss." Now this 
"friction and loss," when expressed in money and wealth, 
seem to us socialists stupid because avoidable; but when 
expressed in human life and misery, they seem so in- 
tolerable that we are prepared if necessary to shatter 
to bits the whole system that underlies them, in order to 
"remould it nearer to the heart's desire." We are 
relieved then when we discover that by applying wisdom 
instead of temper to the solution of the problem, it is 
unnecessary to do any shattering, that we can remould 
it without violence, and that this is what Socialism 
proposes to do. Mr. Beveridge disposes of the Socialist 
solution in a sentence: "To abolish the competitive 
stimulus," he says, "is to abolish ' either the possibility 
of, or the principal factor in material progress.' " 2 

1 " Unemployment: A Problem of Industry," by W. H. Beveridge 
and others. 
2 Ibid., p. 63. 



68 WHAT CAPITALISM IS 

But these few words beg the whole question: Need 
we abolish the competitive stimulus in the adoption of 
the Socialist cure? Can we not confine ourselves to 
eliminating the gambling element in it? Can we not 
diminish the stakes without abandoning them altogether?. 
Can we not take our arsenic in tonic instead of in fatal 
doses? These questions belong to our constructive 
chapters at the end of the book. I shall take up here only 
a few other points about unemployment which orthodox 
economists do not sufficiently emphasize, in order that 
there may be no doubt as to the magnitude of this evil 
and as to the duty upon us to eliminate it if we can. 

Few things irritate the bourgeois more than to speak 
of workingmen as "wage slaves." I have seen college 
professors lose their temper over this word so often that 
they have served to suggest that in using it we are, as 
children say, getting "warm." We are very near the 
Negro we are looking for in the woodpile. Unemploy- 
ment will help us in our search. 

Not only the slave, but the savage, has a great ad- 
vantage over the workingman, in that the former is 
never unemployed and the latter need never be so unless 
he chooses. Unemployment then is the peculiar prod- 
uct of our civilization. It is only under this competi- 
tive system of ours that a strong, hearty, able-bodied 
man, not only willing, but burning to work, with plenty 
of work to be done and with plenty of food to be eaten, 
is refused both. Although there are vacant lots in the 
heart of our cities and deserted farms within a few miles 
of them, the unemployed and the women and children 
dependent on them are to starve because owing to the 
"failure of adjustment between supply and demand," 
no one for two years past has been able to make money 
by employing them. Why this is so will more fully 



CAPITALISM IS STUPID 69 

appear in Book II, Chapter III. It is omy necessary 
here to point out the forces that tend to make the wage 
slave not only more unfortunate, but more dangerous 
to the community than the African slave. 

The slave owner has the same interest in the welfare 
of his slaves as the cowboy in his cattle. God knows 
this is not much, but it is sufficient to keep slaves and 
cattle in good condition if only for the purpose of getting 
work out of the one and high prices out of the other. 
The interest that a slave owner has in the health of his 
slaves is a continuing one; it lasts during the working 
years of his slave. The owner has paid a price or his 
slave has cost him a certain amount to raise. The 
interest of the owner, therefore, is to get the most work 
out of the. slave during his working years. For this 
purpose he lengthens these working years to the utmost 
possible; and accordingly feeds and clothes his slave 
sufficiently and does not overwork him. 

The interest of the factory owner is just the opposite. 
He has paid nothing out of his capital for what is called 
the "free labor" he employs; and because free labor 
exacts a high wage and short hours, it is to the interest 
of the factory owner to get the greatest work possible 
out of his employee, regardless whether his employee 
is overworked. It is to his interest, not only to use 
his employee, but to use him up; and to this end he speeds 
up his machinery to the utmost point in order to force 
his emloyees to do the greatest work possible during the 
hours of employment, and has recourse to pacemakers. 
He does this with perfect security, because he has an 
unlimited amount of young labor always at his disposal 
to replace employees prematurely worn out from over- 
work and the diseases that come from overwork. The 
factory owner does not adopt these methods out of 



70 WHAT CAPITALISM IS 

hardness of heart, but out of the necessity of the market. 
If he pays a workingman high wages for short hours, he 
must get the greatest work out of him if he is to compete 
successfully with other factory owners in the same line 
of business. Even the most merciful factory owners 
have to overwork their employees in order to sell goods 
at prices fixed by the merciless market. This system 
results in manifold evils. It creates a class not only of 
unemployed, but of unemployables; men who cannot 
render efficient service because of disease and of the 
drunkenness to which overwork tends; for when a work- 
ingman feels his strength begin to wane he has recourse 
to stimulants to last his day out, and once the habit of 
stimulants is contracted, he loses his appetite for nourish- 
ing food and becomes thereby more and more confirmed 
in the use of intoxicants. 

We have here, therefore, a perpetual and necessary 
production of unemployed and unemployable; the indus- 
trial town resembles a gigantic threshing machine which 
produces its regular quota of unemployed and unemploy- 
ables as certainly as a threshing machine produces 
chaff. 

This leads to another point to which I wish to at- 
tract special attention. Unemployment is generally 
regarded as a purely temporary evil. Indeed, the New 
York Times took me to task for speaking of it as a 
permanent evil. 1 The reason for this widespread error 
is that permanent unemployment is a thing to which 
we have grown accustomed. Charitable societies are 
familiar with it and know that it exists all the time; 
but it is only when unemployment adopts gigantic 
proportions so that the unemployed crowd our parks 
and streets and even indulge in public demonstrations, 

1 N. Y. Times, Oct. 2, 1908. 



CAPITALISM IS STUPID 71 

that the public becomes aware of it. And it is not only 
the regular operation of the industrial threshing machine 
that produces the unemployed and unemployables; it 
is the character of certain industries and occupations 
such as seasonal industries — for example, carpentering 
and casual occupations, such as stevedores and long- 
shoremen. Mr. Beveridge gives a very graphic picture 
of the unemployment on the London docks: 1 

Most of us have heard of the great Dock Strike of 1889, 
and of the distinguished men who undertook to settle 
it. Efforts were made then to regulate work on the 
wharves, and while these efforts did improve the condi- 
tion of the best of the men, as Mr. Beveridge says, "it is 
seldom realized how small a proportion of the total field 
of dock and wharf labor is really covered by the reform." 2 

He attributes the maintenance of evil conditions still 
prevailing on the docks to the " separation of the interests 
of wharfingers, shipowners, and contractors," to our old 
enemy — competition. 

To appreciate the evil effects of casual or irregular 
employment, we have again but to quote Mr. Beveridge: 

" The knowledge that any man, whatever his experience, 
however bad his antecedents, might get a job at the docks, 
attracted to their neighborhood a perpetual stream of 
blackguards, weaklings and failures from other every 
occupation. The experience, soon made, that regular 
attendance was not necessary to secure selection on days 
when work happened to be plentiful, and the daily 
alternations of hard exercise and idleness rapidly de- 
veloped in those who came, if they had it not before, the 
greatest irregularity of habits, and physical or moral 
incapacity for continuous exertion. The low physique 

1 "Unemployment." W. H. Beveridge, p. 87. 

2 Ibid., p. 91. 



72 WHAT CAPITALISM IS 

and half-starved condition of many of the laborers made 
their work dear at 4d. an hour." x 

Here he falls in with the evil feature of the competitive 
system which has been described as gambling with 
nothing less for stakes than life, health and happiness: 
"Finally," concludes Mr. Beveridge, "the door is opened 
to abuse of patronage; convivial drinking and even 
direct bribery are not unknown as a means of securing 
employment." 2 

The form of bribery paid by employees when of the 
female sex is a still darker side of this dark subject. 3 

Another permanent cause of unemployment is under- 
employment and underpayment. In many occupations, 
such as coal mining, underemployment is averaged 
over a year so as to cause little unemployment but much 
distress; the high wages which the miners are able to 
stipulate for through their trade unions are reduced by 
diminishing the days of work in the year. In other 
occupations underemployment and underpayment re- 
duce employees to a state of starvation, which of course 
swells the rank of the unemployables. 

Having seen how the pressure of the market forces 
factory owners to overwork their employees and to 
dismiss all who are not able to earn the wages they receive; 
how casual employment creates and keeps alive a class 
of labor such as is described by Mr. Beveridge, and as 
must perpetually throw employees either upon charity 
or into the street; and having seen that this is a result 
of inherent and constant conditions of our industrial 



1 "Unemployment." W. H. Beveridge, p. 87. 

2 Ibid., p. 98. See also " Problems of Unemployment in the Lon- 
don Building Trades." N. B. Dearies (1908, J. M. Dent). Cf. pp. 
87-8. 

3 Book II, Chapter I. 



CAPITALISM IS STUPID 73 

system, we are not surprised to find that statistics of 
unemployment indicate that it exists not only in periods 
of industrial depression, as is imagined by the New York 
Times and others, but is, on the contrary, a permanent 
feature. , For example, the September Report of the 
New York Commissioner of Labor shows that the average 
percentage of unemployment during the prosperous 
period between 1902 and 1907, was 16.1 per cent. We 
shall see later when we endeavor to calculate the amount 
of our population affected by unemployment, that 16.1 
per cent, being derived entirely from trade union reports, 
does not fully represent the whole, because it is generally 
admitted that unemployment prevails in much larger 
proportion in unorganized labor than in organized. 1 
The last United States Census sets down the number 
of factory hands at over 7,000,000. Taking therefore 
the official figures as representing the minimum of con- 
stant unemployment, 16 per cent of 7,000,000 is 1,120,000, 
and as every factory hand has an on average four persons 
dependent upon him, this means a total population of 
4,480,000, or roughly, four millions and a half perma- 
nently in want in the United States owing to this unem- 
ployment which orthodox economists recognize as a 
necessary result of the competitive system. i 

But the public takes no account of the fact that our 
industrial system regularly reduces a population of 
4,500,000 to want. The public only takes account of 
the extraordinary unemployment which occasions dis- 
order and riot in times of panic and industrial depression. 
Panics and industrial depressions must not be confounded. 
We have seen that industrial depressions are the in- 
evitable result of what Mr. Beveridge calls " cyclical 

1 Mr. Beveridge denies this in one place, p. 21; but himself 
produces proof of it later, p. 35. 



74 WHAT CAPITALISM IS 

fluctuations" and recur with abominable regularity. 
Quite independent, however, of these regularly recurring 
industrial depressions due to the working of the competi- 
tive system, there are financial crises or panics due to 
similar perturbations in our money market. Although 
they differ in many respects from industrial depressions, 
nevertheless they have in common with them the in- 
evitable result of producing unemployment on a large 
scale. The panic of 1907 began as a purely financial 
crisis, but promptly became a lengthy period of industrial 
depression. It is not necessary at this point to discuss 
the relation between these two. But it is important 
that mere scarcity of money in the panic of 1907 produced 
unemployment more suddenly and in larger proportions 
than any other panics that have preceded it. 

Not only private enterprises such as railroads, but 
public bodies such as municipalities, being no longer 
able to borrow money, had not only to abandon work 
already voted, but to put a sudden stop to work already 
undertaken. Laborers were dismissed in batches of five 
thousand at a time, and every manufacturing and rail- 
road plant was driven by the impossibility of borrowing 
money to cutting down expenses with a view to in- 
creasing the efficiency of the plant. Thus the Pennsyl- 
vania Railroad announced that it had so increased the 
efficiency of its plant that it was able to dismiss 30,000 
men during the year; the New York Central during 1907 
dismissed ten per cent of the staff upon its main line 
alone; seventy-six railroads, operating over 172,000 
miles of railroad, report an economy of nearly $100,- 
000,000, most of which constituted an economy in 
wages, 1 and Senator Guggenheim, in an interview pub- 
lished in the Wall Street Journal, 2 said: 

1 Financial Chronicle, Sept. 26, 1908. 2 August, 1908. 



CAPITALISM IS STUPID 75 

"For the first time in many years the employer is 
getting from his men the 100 per cent in efficiency for 
which he pays. It is a safe assertion that prior to the 
panic the efficiency of labor was no higher than 75 per 
cent, perhaps not even that." 

Special attention is directed to the foregoing because 
unemployment is ceasing to be a merely accidental- and 
periodic phenomenon and is assuming not only larger, 
but more permanent proportions. In other words, the 
30,000 men dismissed by the Pennsylvania Railroad 
were not dismissed because of a temporary cessation of 
traffic. They were dismissed because the Pennsylvania 
Railroad has succeeded in so raising the efficiency of 
their system that they can permanently run their lines 
with 30,000 less employees than they could before. 

Let us endeavor to form some idea of the unemploy- 
ment during the last two years. The only State that 
regularly publishes official reports on this subject is 
New York. The State of New York derives its informa- 
tion from such trade unions as report to it; and from 
these reports it seems that during 1908, the average 
unemployment has been about one-third. 

As has been intimated, an average of one-third of 
organized labor reported by trade unions, means a very 
much larger proportion of unorganized labor. It is true 
that Mr. Beveridge disputes this in one passage, 1 but he 
himself furnishes the evidence of its truth in several 
others; as for example, where he says that "in practice, 
therefore, it is found that acute recurrent distress at 
times of seasonal depression is confined to the unskilled 
occupations"; 2 and again, he points out how the lack 
of intelligence of unorganized and semi-skilled and 
unskilled workmen makes it impossible for them to 

1 Beveridge, "Unemployment," p. 21. 2 Ibid., p. 35. 



76 WHAT CAPITALISM IS 

take account of the fluctuations that produce unemploy- 
ment. "The measure of their failure/' he says, "is to be 
found in those periods of clamant distress which evoke 
Mansion House Relief Funds. " x 

In Chapter V, again, he points out the chronic distress 
of unskilled men and that unemplo}^ment is largely due 
to lack of organization. It stands to reason that whereas 
a factory owner thinks twice before dismissing a skilled 
workman he will not hesitate to dismiss an unskilled 
workman whom he can replace at any time. 2 

However much authorities may differ on this in Europe, 
there can be no question about it in America. It was 
impossible to read the daily papers in October, 1907, 
without being satisfied that the first men to suffer were 
the unorganized and unskilled. Hardly a day passed for 
weeks without papers announcing the discharge of 
workingmen in batches of thousands at a time. It was 
only later that factories shut down, and then for the most 
part, a day or so in the week. Unfortunately, because 
the unskilled workingman is unorganized, it is impossible 
to get any information regarding the extent of unem- 
ployment in their ranks; but it can be stated without 
fear of contradiction, that the percentage of unemploy- 
ment is much larger in the ranks of the unorganized than 
in those of trade unions. 

The one-third, therefore, as shown by the New York 

1 Beveridge, " Unemployment/ ' p. 65. 

2 The managers of Trusts have pointed out that in order to keep 
their highly skilled men, they have to sell often at a loss; and they 
give this as the reason for what is called "dumping" their goods 
into foreign markets. In other words, in order not to lower prices 
in America during periods of depression due to overproduction, 
they sell their goods at a loss abroad. — Industrial Commission, 
Vol. I, p. 282, 



CAPITALISM IS STUPID 77 

Labor reports, is below the mark, I will not undertake 
to say how much. In endeavoring to make an estimate 
as to the extent of unemployment throughout the entire 
Union, we must remember that the percentage of em- 
ployment in New York is likely to be larger than in 
purely agricultural States. On the other hand, nowhere 
is the percentage of unemployment greater than in the 
States devoted to mining. The difficulty under which 
we find ourselves, therefore, in giving the exact figure 
of the extent of unemployment, makes it wise not to 
increase the one-third reported by trade unions in New 
York in consequence of the certainty that this propor- 
tion was far larger in unorganized labor; and on the 
other hand, not to decrease it out of the consideration 
that there were some States in which the percentage 
would not be as much as in the State of New York. 
Under these circumstances it may be assumed that 
the percentage reported by the trade unions to the 
Labor Department fairly represents the average unem- 
ployment throughout the whole United States of America. 
Taking the census figures of over 7,000,000 as that of the 
workingmen in the country, one-third of 7,000,000 is 
2,333,333; add to this the number of persons dependent 
on these workingmen; four to each, 9,333,333; add this 
to the first figure and we get a population of 11,666,666 
which for two years has been on the edge of starvation, 
and saved from it only through accumulated earnings, 
help from trade unions and charity. As the unskilled 
workingman can hardly ever save money owing to the low 
rate of his wages, and as he is not organized and never 
receives benefits from a union, it may be said that the 
large majority of these have been living for two years on 
the charity of their neighbors. 

It is probable, too, that the trade union member has 



78 WHAT CAPITALISM IS 

been reduced to depending upon charity; for the last 
report on savings banks shows that $25,000,000 have 
been withdrawn during the last year, and their presidents, 
when interviewed, recognized that this diminution was 
caused by the withdrawal of funds by the unem= 
ployed. 

It was also due to the withdrawal of funds by the trade 
unions. In October, 1907, many trade unions had large 
sums accumulated which have been applied during the 
year to the support of the unemployed. The Union of 
Pressmen had $30,000 last October, all of which has gone 
to support the unemployed during the year, and this 
union has suffered comparatively little, only 20 per cent 
being now idle. This 20 per cent is supported by 
assessments on those who are at work. 

As regards remedies for unemployment, Mr. Beveridge 
says that "no cure for industrial fluctuation can be hoped 
for; the aim must be palliation." And he dwells at 
great length upon the palliative measures to which 
Switzerland, Germany, Belgium and to a less extent, 
France, have recourse; employment bureaus, insurance 
against unemployment, and farm colonies, to which last 
he refers only incidentally, pointing out that Hollesley 
Bay had proved for the most part ineffectual. 1 These 
palliatives have, however, rendered comparatively small 
service. In Germany, where they have all been applied, 
unemployment during 1908 reached the rioting stage, at 
which it becomes dangerous and commands the attention 
of our economists, as in England. The palliative, to which 
Mr. Beveridge only incidentally refers, is, to my mind, 
calculated not only to diminish the evil immediately, 
but to serve as an important bridge over which the un- 
employed and unemployables may pass into the Promised 

1 Beveridge, " Unemployment/' p. 182. 



CAPITALISM IS STUPID 79 

Land. The farm colony, however, belongs to the con- 
structive chapter at the end of the book. 

Another necessary consequence of the competitive 
system is a form of unemployment which, because of its 
importance, deserves consideration by itself — Prostitu- 
tion. 

§ 3. Prostitution 

Prostitution is not an easy or agreeable subject to treat; 
it will be disposed of, therefore, in the fewest words 
possible. The treatment of it will be summary, not 
because the subject is unimportant, but because it is 
abominable. And if it is true that Socialism would put 
an end to it, this alone, for those who can comprehend 
the horrors thereof, ought to justify Socialism whatever 
be the sacrifice necessary to the realization of it. If 
our present competitive system is responsible for the 
evil to both sexes that results from prostitution, then the 
maintenance of this system is, so far as every one of us 
by indifference tolerates it, nothing less than crime. 

We must begin by making ourselves clear as to what 
prostitution is. 

Mere promiscuity of sexual relation does not constitute 
prostitution, for many a woman is unfaithful to her hus- 
band many times without losing social consideration, 
provided only she conduct herself with sufficient dis- 
cretion to avoid scandal. 

Nor does intercourse for money constitute prostitution; 
for then prostitution would include all those who marry for 
money. The real definition of a prostitute is a woman 
who has intercourse both promiscuously and for a money 
reward, promiscuity and gain must be united. 

Now it will later be made clear that in a Socialist state 




80 WHAT CAPITALISM IS 



because every woman would be furnished an opportunity 
to work, none would be driven to prostitution. 

Prostitution is generally the direct result of the dis- 
grace put upon a woman by loss of virtue. She is turned 
out of her home and her legitimate employment. She 
has then but one recourse. It is sometimes due to lack 
of employment; sometimes to the greater facility prosti- 
tution affords for making a livelihood with the least 
labor. In all these cases the primum mobile is the 
making of a livelihood. As Socialism would remove this 
primum mobile, would assure a livelihood to every woman 
upon the single condition of her performing her allotted 
work — there would be no motive for prostitution. If 
she refused to perform her allotted task she would be- 
come a pauper— but a prostitute never; for a Socialist 
state, as will be later explained, would segregate paupers 
in farm colonies, where they would be compelled to sup- 
port themselves, and would not leave them to demoralize 
their neighbors by profligacy and prostitution. 

It may be objected that society keeps itself pure by 
casting out women of loose character, and that an innocent 
girl should not be called upon to work in a factory side 
by side with one who will deprave her if she can. An 
exhaustive answer to this would involve a study of the 
special conditions of each State, the laws of each State, 
the mental attitude of the people, their tolerance of im- 
morality or their intolerance of it. It is a problem com- 
mon to every society. This exhaustive study it is not 
the province of this book to undertake; the subject 
must be disposed of, therefore, by the following general 
considerations : 

In the society of the wealthy to-day we are confronted 
by the same problem as would be presented in a co- 
operative commonwealth in which prostitution would be 



CAPITALISM IS STUPID 81 

rendered impossible by state employment regardless of 
morality. In other words, wealth does for the wealthy 
class what Socialism would do for the unwealthy; it 
makes prostitution improbable if not impossible. And 
the wealthy manage to solve the problem of promiscuity 
— every wealthy society for itself in its own way. 

In one country the woman who outrages morality is 
socially ostracized; in another she is tolerated; in one 
country divorces are not only lawful, but fashionable; 
in others the church forbids divorce but tolerates the com- 
plaisant husband. All these are problems of sex which 
Socialism does not undertake to solve. Later on the scientific 
and ethical aspects of Socialism will, I hope, lead to the 
conclusion that Socialism will so raise our ethical standards 
and habits of mind that sexual irregularities will tend to 
diminish. Prostitution, however, is not a sex, but an 
economic problem. A woman does not receive money 
payment except for economic reasons. If the economic 
pressure is removed she may be licentious, but she will 
not be a prostitute. Chastity ought to be a purely moral 
or social question, not an economic one. The competitive 
system makes it economic, and of all the crimes imputable 
to the competitive system, this is the greatest, for it 
directly perverts not only the human body, but the human 
soul. Of course, unemployment, in degenerating the 
body, ultimately degenerates the soul also, but the latter 
degeneration is more or less remote ; the public conscience 
may be forgiven for not having discovered or taken 
account of it. But that we should see women daily 
compelled by hunger to sell soul as well as body and should 
then shut against them the door of our homes and our 
hearts, is a crime not only against them, but against our- 
selves. We are hardening our hearts as well as theirs. 
We are forcing our minds to that obliquity which sees 



82 WHAT CAPITALISM IS 

in Socialism only " pornographic literature" and "porno- 
graphic propaganda" 1 and charges the men who sacrifice 
their lives to the putting an end to the conditions that 
produce prostitution with "criminal nonsense" 1 and 
"grave mental or moral shortcoming." 1 

This evil, like all evils that arise from the competitive 
system, is not incidental or occasional, but inherent and 
necessary. It cannot be better stated than by Miss 
Woodbridge, the secretary of the Working Women's 
Society, in a report made to the Society on May 6, 1890: 

"It is a known fact that men's wages cannot fall below 
a limit upon which they can exist, but woman's wages 
have no limit, since the paths of shame are always open 
to her. The very fact that some of these women receive 
partial support from brothers or fathers and are thus 
enabled to live upon less than they earn, forces other 
women who have no such support either to suffer for 
necessities or seek other means of support." 

The extent to which wages are reduced below starvation 
rates is also stated as follows: 

"The wages, which are low, we find are often reduced 
by excessive fines, the employers placing a value upon 
time lost that is not given to service rendered. The 
salaries of saleswomen range from $2.00 to $18.00, but 
the latter sum is only paid in rare instances in cloak and 
suit departments. The average salary in the best houses 
does not exceed $7.00, and averages $4.00 or $4.50 per 
week. Cashiers receive from $6.00 to $15.00, averaging 
about $9.00. Cash girls receive from $1.50 to $2.50 per 
week, though we know of but one store where $2.50 is 
paid. In the Broadway stores boys are employed, 
usually on commission. The average salary of one large 
shop for saleswomen and cash girls is $2.40; another 

1 Mr. Roosevelt in the Outlook, 1909, p. 622, 



CAPITALISM IS STUPID 83 

$2.90; another $3.10; but in the latter, the employees 
are nearly all men and boys. We find in many stores 
the rule to fine from five to thirty cents for a few minutes' 
tardiness. In one store all women who earn over $7.00 
are fined thirty cents for ten minutes' tardiness. Cash 
girls who earn $1.75 per week are fined ten cents for ten 
minutes' tardiness." 

It is hardly necessary to comment on a wage to sales- 
women varying from $2.40 to $3.10 a week, and this 
liable to reduction by fines. It will be observed too that 
owners of department stores are compelled by the pressure 
of the market to seek this half -supported help. Miss 
Woodbridge says: 

"In all the stores the tendency is to secure cheap help. 
You often see the advertisement reading thus: i Young 
misses, just graduated, wanted for positions as sales- 
women;' which means that being girls with homes they 
can afford to work cheaper than those who are self- 
supporting." The words "just graduated" constitute 
a direct appeal to the educated — that is to say, partially 
supported — women. 

So a self-respecting young girl who desires to contribute 
to the expenses of the home, sets the rate of wages which 
drives her less fortunate sister to misery and crime, and 
thus becomes the unconscious instrument of her shame. 

If anyone is not satisfied that the conditions above 
described must result, unsavory details of a kind to 
persuade him will be found in the report of Miss Maud 
E. Miner, probation officer of city magistrates' courts, 
published in the Survey. 

Lastly, temptation would be indirectly as well as 
directly diminished by the absence of prostitutes as a 
class. It has been already intimated that prostitution 
committed injustice to both sexes. By this it was in- 



84 WHAT CAPITALISM IS 

tended to refer to the injustice of exposing our young 
men to perpetual temptation furnished by the facilities 
for prostitution. The whole question of sexual morality 
is mainly one of suggestion. Take eight men accustomed 
to believe that they cannot dispense with sexual connec- 
tion; put them in a crew and remove the suggestion that 
they can obtain relief at any time by substituting there-, 
for the notion of loyalty to the crew or a desire to win a 
race, and the desire which before seemed uncontrollable 
practically disappears. The moment the race is over, 
the old suggestion returns, and the night of a boat race 
has become proverbial in consequence. The same is 
true of men who go on hunting expeditions, yachting 
cruises, into lumber camps, etc. Desire becomes dormant 
or controllable as soon as facilities for gratifying it dis- 
appear; the moment the facility returns, the suggestion 
is revived, and desire becomes uncontrollable. 

What, then, would be the consequence if the suggestion 
were minimized by the absence of prostitution altogether? 

But this is not all: Men who seduce young girls and 
married women have learned to gratify their passions 
through the facility afforded by prostitution. If our 
youths were never afforded the chance of taking that first 
step which leads to the facilis descensus, they would, 
from the fact of never having gratified their passions, be 
less likely to undertake to gratify them at the cost of 
seduction. The suggestion would be absent; all women 
would tend to be as sacred to a man as his sister. The 
relation of brother and sister is due entirely to the absence 
of suggestion; he has learned to regard her with an un- 
conscious respect which removes the possibility of erotic 
suggestion. What actually happens in the small family 
of to-day could also happen in the larger family of to- 
morrow. 



CAPITALISM IS STUPID 85 

This must not be understood as a contention that 
Socialism would destroy immorality. Far from it. All 
that is claimed is that it might diminish immorality and 
that it would put an end to prostitution. This last is 
reason enough for it. 

It is impossible to treat of the economic cause of 
prostitution without discussing its ethical consequences, 
because the consequences react upon the cause. But 
we are here chiefly concerned with its economic features; 
and it is impossible to put too much emphasis upon the 
fact that the greatest permanent blot upon our civiliza- 
tion is the necessary result of a competitive system that 
leaves a large part of our women no other means of 
livelihood. 

Although we have carefully distinguished between the 
woman who sells herself to one man for a fortune and the 
common prostitute who sells herself to many men for a 
pittance, the first is often more to blame than the latter, 
because the latter is compelled by hunger while the 
former often barters her chastity out of sheer love of 
luxury. The whole heredity of man may be altered by 
the elimination through Socialism of the sordid motive 
for marriage. Avarice may become diminished by 
sexual selection. For although sexual selection is not 
to-day found to have the force in animal heredity that 
Darwin thought, it is an important factor in human 
heredity, thanks to the opportunity for deliberate selec- 
tion furnished by our institution of marriage. But this 
belongs to another chapter. 

From a purely economic point of view, prostitution 
is to be classed with unemployment, which burdens the 
community with the support of a class that in a coopera- 
tive commonwealth would be self-supporting. It seems 
hardly necessary to state that the dissipation that attends 



86 WHAT CAPITALISM IS 

the life of a prostitute unfits her for work. And not 
content with being idle herself, she causes others to be 
idle and constitutes a permanent source of contagion, 
moral and physical, in our midst. 

This is a necessary consequence of the competitive 
system. 

§ 4. Strikes and Lockouts 

Another necessary result of a system of production 
that sets the man who works with his hands against the 
man who works with his head, is the conflict between 
capital and labor, that expresses itself in strikes and 
lockouts. The conflict itself is treated in detail in the 
chapter entitled Trusts and Trade Unions. Here we 
shall confine ourselves to its wastefulness in time and 
money. 

The sixteenth Annual Report of the United States 
Commissioner of Labor, 1 for 1901, estimates the loss to 
employees resulting from strikes and lockouts from Jan- 
uary 1, 1881, to December 1, 1900 — a period of twenty 
years — at $306,683,223, and the loss to employers during 
the same time at $142,659,104— together $449,342,327; 
or roughly — $450,000,000. It is interesting to note how 
much less is the loss to employers who are relatively 
able to bear it than to employees who are relatively 
unable to bear it. But without regard to the injustice 
of a system that bears so hardly upon the workingman, 
no practical American who desires to see production at- 
tended with the least waste and friction, can look upon 
such a loss as this without impatience and humiliation. 

Quite irrespective of the misery that results from un- 
employment and the evils that attend it for the whole 

1 P. 24. 



CAPITALISM IS STUPID . 87 

community — employed as well as unemployed — too 
much emphasis cannot be put upon the foolish waste of 
human energy that unemployment occasions. There 
have been for two years in this country over a million 
(and probably much more than a million) able-bodied men 
willing and anxious to assist in the production and dis- 
tribution of the things we need, and who have not been 
permitted to do so — the energy of over a million, and 
probably a great many more, absolutely wasted. 

I have been amazed at the indifference of our wealthy 
class, and even of the philanthropists amongst our wealthy 
class, at this condition of the unemployed until a clue 
to this indifference was furnished by the naivete of a few 
of our captains of industry. 

Here is what one of them, Daniel Guggenheim, pres- 
ident of the American Smelting and Refining Company, 
says to the Wall Street Journal, August 10: 

"Every manufacturer in the country has lowered his 
costs of production, partly through cheaper prices for 
raw materials, but principally on account of the increased 
efficiency of labor. The latter is one of the redeeming 
features of the current depression. 

"For the first time in many years the employer is 
getting from his men the 100 per cent in efficiency for 
which he pays. It is a safe assertion that prior to the 
panic the efficiency of labor was no higher than 75 per 
cent, perhaps not even that. - 

"Another thing — wherever a thousand men are needed, 
twelve hundred apply. The result is that the thousand 
best men are picked; the others, of necessity, must be 
turned away. But the thousand work more conscien- 
tiously, knowing that two hundred are waiting to take 
the places of the incompetents. " 

Here again we have one small class benefited by the 



88 WHAT CAPITALISM IS 

misery of millions of unemployed, and willing to per- 
petuate this condition of unemployment in order to 
profit by it. Of all the waste that attends the com- 
petitive system this waste of human energy is the most 
unjust, and the most unjustifiable, unless it can be found 
that the pauperism it imposes on the millions and the 
heartlessness it promotes in the few, contribute, as the 
bourgeois tells us, " to make character ! " But if the waste 
of human energy at the cost of human agony is a matter 
of indifference to business men, there is another form of 
waste which is likely to appeal to them. We Americans 
pride ourselves upon our business efficiency. In the 
next chapter we will consider the waste of money that 
attends the competitive system and how the ablest 
business men have set about eliminating it. 

§ 5. Adulteration 

It would seem as though the indifference of the public 
at large to such wicked and wasteful things as unemploy- 
ment, strikes, lockouts and prostitution, were due to 
hardness of heart; but if we observe a similiar indif- 
ference to adulteration which concerns every individual 
to the utmost, we have to recognize that tolerance of the 
evils of the competitive system is due not so much to 
hardness of heart as to stupidity. For since the dawn of 
our present civilization, adulteration has been a constant 
and abominable evil. As the Encyclopedia Americana 
puts it: "Adulteration is coexistent with trade;" 1 and 
as the Britannica puts it : " The practice of adulteration 
has become an art in which the knowledge of science and 
the ingenuity of trade are freely exercised." 

Before industrialism had reached its present develop- 

1 Americana, Vol. I, Subj . Adulteration. 



CAPITALISM IS STUPID 89 

ment the statutes enacted against adulteration were severe. 
They punished it with the pillory and tumbrel. The 
following are the words of the statute: 

" If any default shall be found in the bread of a baker 
in the city, the first time, let him be drawn upon a hurdle 
from the Guildhall to his own house through the great 
street where there be most people assembled, and through 
the great streets w r hich are most dirty, with the faulty 
loaf hanging from his neck; if a second time he shall 
be found committing the same offence, let him be drawn 
from the Guildhall through the great street of Cheepe, 
in the manner aforesaid, to the pillory, and let him be 
put upon the pillory, and remain there at least one hour 
in the day; and the third time that such default shall 
be found, he shall be drawn, and the oven shall be pulled 
down, and the baker made to forswear the trade in the 
city forever." * 

As the Encyclopaedia puts it: "All this has given 
way to the force of free trade." In other words, freedom 
of industry has been interpreted to mean freedom of 
adulteration, and the Act of 1872 accordingly punishes 
adulteration with "a sum not to exceed fifty pounds," 
and only provides imprisonment in case of a second 
offence. 2 

It is interesting to take up any standard encyclopaedia 
and read the cold-blooded accounts of the various poisons 
introduced into our food and other commodities for the 
purpose of adulteration. The matter has been well 
treated by Mr. W. J. Ghent; 3 and in spite of the fact 
that he is a prominent Socialist his book may be read, 

Encyclopaedia Britannica, Vol. I, p. 51. 

2 An act to amend the laws of adulteration of food, drinks, and 
drugs, 1872. 

3 "Mass and Class," by W. J. Ghent, p. 180-200. 



90 WHAT CAPITALISM IS 

because in every case he cites an authority, and his author- 
ities are, for the most part, reports of State Commissions 
and Health Departments. 

It is probable that no article enters more universally 
into consumption than milk, and of all the articles that 
we consume, it is most important that milk should be 
pure, because it is the food of infants and children. Yet 
in spite of all the laws passed for the prevention of adul- 
teration of milk, "in New York city, during 1902, of 3970 
samples of milk taken from dealers for analysis, 2095, or 
52.77 per cent, were found to be adulterated. The 
arrests in the city under the inspection acts were 193 in 
1899, 460 in 1900, 464 in 1901, and 722 in 1902." * 

The experience in Ohio has been just the same as that 
of New York: 

" The Dairy and Food Department of that State was 
created in 1886. After seventeen years of inspections, 
arrests and prosecutions, adulterations of milk still 
continue. 'Out of 1199 samples tested by the chemists/ 
says the report for the year ending November 15, 1903, 
' about one-fourth were found to be either below the re- 
quired standard in solids and butter fats, or adulterated 
with that base adulterant known as "formalin" or 'for- 
maldehyde." ' " 2 

Mr. A. J. Wedderburn calculates that 15 per cent of 
all our products are adulterated; that is to say, $1,125,- 
000,000 per annum." 3 And this figure does not include 

1 " The Health Department/ ' A pamphlet published by the City 
Club (1903), p. 23. 

2 Eighteenth Annual Report of the Ohio Dairy and Food Com- 
mission (1903), p. 8. 

3 Address of Dr. W. C. Mitchell of the Colorado State Board of 
Health, before the Portland Pure Food Convention (1902). Journal 
of Proceedings of the Sixth Annual Convention of the National As- 



CAPITALISM IS STUPID 91 

adulterations of wine, whisky, beer, tooacco, drugs or 
patent medicines. 

Of eleven samples of coffee compounds analyzed by the 
Pennsylvania Department in 1897-1898, "six contained 
no coffee whatever, and none contained more than 25 
per cent. The contents ranged from pea hulls (65 per 
cent in one instance) to bran and the husks of cocoa 
beans. " l 

The Ohio Report of 1898, in describing what is called 
"renovated butter," says as follows: 

"These factories have agents in all the large markets 
who buy up the refuse from the commission men and 
retailers, taking stale, rancid, dirty and unsalable butter 
in various degrees of putrefaction; this refuse is put 
through a process of boiling, straining, filtering, and 
renovating, and is finally churned with fresh milk, giving 
it a more salable appearance. The effect is only tem- 
porary, however, as in a few days the stuff becomes 
rancid and the odor it gives off is something frightful. 
It is usually sold to people having a large trade who will 
dispose of it quickly, for if it is not consumed at once it 
cannot be used at all without being further renovated. " 2 

After immense agitation we have had recent legisla- 
tion of a character to render adulteration difficult; the 
Federal Food and Drug Act which went into effect January 
1, 1907, since reenacted in thirty of our States, and I 
suppose that many of our fellow-citizens think that this 
Food and Drug Act is going to some extent to put an end 
to adulteration. But is the experience of the entire race 
during its entire history to be treated as of no importance 

sociation of State Dairy and Food Departments, held at Portland, 
Ore., pp. 378-383. 

1 " Portland Proceedings/' p. 469. 

2 Ohio Report (1898), p. 10. 



92 WHAT CAPITALISM IS 

in this connection? Have we not had laws of this kind 
before, punishing adulteration in every way — by the 
pillory and tumbrel as well as by fines and imprisonment — 
and has any of them had any permanent effect in putting 
an end to adulteration? How many more centuries are to 
elapse before we learn the lesson that, so long as you give 
to one set of men an irresistible motive for adulteration, 
no laws — no penalties, light or severe, will materially 
check that impulse. If they are severe the courts will 
not enforce them; if they are light the trade will dis- 
regard them. 

It is true that the adulteration of the things we eat 
and drink is more important than the adulteration of 
things we wear. Nevertheless it is a matter of no small 
importance that there is hardly a thing that we do wear 
that is not adulterated in an astonishing degree. An in- 
teresting paper on this subject was read before the Lake 
Placid Conference on Home Economics, 1908. 1 The art 
of adulterating textiles seems to be taught in our textile 
schools: "As a student in a textile school said to a visitor: 
'Our teacher is so clever, he can spin wool and cotton 
together so they can never be detected ;'" and adultera- 
tion appears to be practically authorized under our New 
York State law of 1900, which provides that " collars 
marked 'linen/ 'all linen/ and 'pure linen/ must contain 
at least one thickness or ply of pure linen/ ' It is a com- 
mon saying that, although the total supply of wool in the 
world is only sufficient to meet one-third of the demand, 
there is always wool to be had. 

Of course, one principal reason why adulteration pre- 
vails is that it is impossible for the ordinary consumer to 
detect it. For example, in order to analyze stockings 

*"The Study of Textiles/' by Miss Nellie Crooks, Teachers Col- 
lege, Columbia University, 1908. 



CAPITALISM IS STUPID 93 

they must be destroyed. No consumer is possessed of the 
technical schooling necessary to distinguish all-wool or 
all-silk goods. Indeed it is stated by high authority 
that such a thing as all-silk and all-wool is not to be 
purchased in the market, though we continually buy 
articles declared to be all-wool or all-silk. 

I do not know whether the advocates of the present 
industrial condition, on the ground that it "makes char- 
acter," would go so far as to approve of adulteration for 
this reason. It must be admitted, however, that virtually 
everybody engaged in manufacture, production, and 
distribution is a partner in the deliberate adulteration 
of things for the purpose of cheating the public. This 
has been coexistent with trade and has become recognized 
as one of our modern arts. The extent to which adultera- 
tion is organized can be judged by the fact that "no less 
than 40,000,000 pounds of fiber made from old rags, called 
1 shoddy/ are annually made in Yorkshire, at an es- 
timated value of £8,000,000 sterling, and that all is used 
for adulterating woolen cloth." 1 

1 Encyclopaedia Britannica, Vol. I, Subj. Adulteration. 



CHAPTER II 

CAPITALISM IS WASTEFUL 

Under the system of free competition in the beginning 
and middle of the last century, every investor who saw a 
profit in refining oil or sugar, or making steel, put up a 
refinery or factory. The aim of every factory was to 
manufacture the largest amount possible and sell it at 
the highest price possible; and this is what Herbert 
Spencer x and the Manchester School regard as the ideal 
system of production. Now let us see just what happens 
as a result of this system of unlimited competition. 

1 '"A Plea for Liberty," p. 17: 

"Under our existing voluntary cooperation with its free con- 
tracts and its competition, production and distribution need no 
official oversight. Demand and supply, and the desire of each man 
to gain a living by supplying the needs of his fellows, spontaneously 
evolve that wonderful system whereby a great city has its food 
daily brought round to all doors or stored at adjacent shops; has 
clothing for its citizens everywhere at hand in multitudinous 
varieties; has its houses and furniture and fuel ready made or 
stocked in each locality; and has mental pabulum from halfpenny 
papers, hourly hawked round, to weekly shoals of novels, and less 
abundant books of instruction, furnished without stint for small 
payments. And throughout the kingdom, production as well as 
distribution is similarly carried on with the smallest amount of 
superintendence which proves efficient; while the quantities of 
the numerous commodities required daily in each locality are 
adjusted without any other agency than the pursuit of profit." 

94 



CAPITALISM IS WASTEFUL 95 



§ 1. Getting the Market 

Every manufacturer and refiner has to find purchasers 
for his product. This effort to find purchasers is called 
in the trade, "getting the market. " 

The expression "getting the market" covers all the 
expenses attending the bringing of goods to the attention 
of the public, and they may be roughly divided into two 
principal categories — advertising and commercial trav- 
ellers. The public little appreciates the enormous cost 
which attends the work of finding a purchaser. Mr. 
Bradley, after a careful calculation, estimates that 
"somewhere between the distiller and the consumer 
in this country forty millions of dollars are lost; 
this goes primarily to the attempt to secure trade." 1 
Mr. Dowe 2 the President of the Commercial Travellers' 
National League, testifies that 35,000 salesmen have been 
thrown out of employment by the organization of trusts, 
and 25,000 reduced to two-thirds of their previous 
salaries. This would represent a loss of $60,000,000 in 
salaries on a basis of $1200 each. He cites, as instances 
of trusts that have dismissed salesmen, the baking powder, 
bicycle, chair, paper-bag, rubber, tin-plate, steel and rod, 
sugar, coffee, thread and type-founders' combinations. 
Not only do trusts dismiss salesmen, they substitute for 
salesmen who, prior to the organization of the trust had 
been earning $4000 to $5000 a year, cheaper salesmen who 
receive $18 a week. He also estimates that the dis- 
missal of commercial travellers means a loss to railways 
of about $250 per day, 240 days in the year; in all, 
$25,000,000. The loss to hotels is about as much, and 

1 Report of the Industrial Commission, pp. 829-831, Vol. I, 1900. 

2 Ibid., pp. 27-36. 



96 WHAT CAPITALISM IS 

"many hotels are likely to become bankrupt if any more 
travellers are taken off." 

§ 2. Cross Freights 

Another waste attending the competitive system 
results from "cross freights," the double freight a re- 
finer sometimes pays for hauling oil from the well, or 
sugar from the nearest seaboard and back over exactly 
the same ground, when refined, to the customer. So also 
the steel manufacturer sometimes, pays freight for hauling 
ore to the coal mine or coal to the ore, and back, after 
smelting, to the customer. 

This waste resulting from cross freights is only a small 
part of a similar waste that results from competition 
in the task of distribution — or retail trade. 

We are all familiar with the amazing results obtained 
by the national enterprise known as the Post Office, and 
how, for the insignificant sum of two cents, a letter written 
in New York can be delivered in an incredibly short 
space of time in San Francisco, and even perhaps more 
incredibly in the heart of the Rocky Mountains. 

Let us consider for a moment the cost of doing this 
were letters distributed throughout the country in the 
same way as our other commodities, as for example, milk, 
coal, or bread. It would be interesting to calculate how 
many hundred dealers in milk there are in New York * 
or London, equipped with their own horses, wagons, and 
men, each engaged in delivering milk all over the city; 
add to these the thousands distributing in like manner 
bread, and the thousands distributing coal, and so on 

1 This work has been in part eliminated by combination. But 
the economies resulting therefrom have all gone to the combina- 
tions. The consumer pays just as much as he did before. 



CAPITALISM IS WASTEFUL 97 

with butter, eggs, meat, fish, vegetables, and all other 
things that enter into our daily consumption. 

Every block of houses is served with milk by this 
large number of milk dealers instead of by one, as would 
be the case if the distribution of milk were in the hands 
of one agency; so every block is furnished with butter, 
eggs, meat, fish, and vegetables by this large number 
of dealers in butter, eggs, meat, fish, and vegetables, in- 
stead of by one, and so on, through every article that enters 
into our daily use. 

Compare with this the economy of time, labor, and 
expense effected by the Government Post Office through 
sorting letters beforehand according to streets, and con- 
fining the distribution in any one street to a single carrier 
who distributes the letters with the greatest economy of 
time and labor, from door to door. 

No practical business man would be guilty of the 
stupidity of putting a hundred men to do the work that 
could be done just as well by a single man; and yet, this 
is exactly the stupidity of which the competitive system 
is guilty. Let us consider the unnecessary number of 
butcher shops in the city of New York. 1 

Before methods of communication had attained their 
present development, it was necessary that there should 
be butcher shops in every block to satisfy the needs of 
the people in the block. But to-day, the telephone ser- 
vice permits of ordering meat at a great distance, and 
the automobile permits of this meat being rapidly de- 
livered to the consumer. The best housekeepers resid- 
ing downtown to-day go for their meat to a butcher who 
lives in Harlem. Now there is no reason why this 

1 Trow's Business Directory of New York city, 1909, lists about 
4000 retail butcher shops in Manhattan and The Bronx. There are 
about 275 postal stations in the same territory. 



98 WHAT CAPITALISM IS 

Harlem butcher should not furnish all the meat to the 
island of Manhattan, or indeed to all in Greater New 
York. But there is a reason why under our competitive 
system this should not take place, and this is the stupidity 
of butchers in particular and the stupidity of the commu- 
nity at large. Most butchers believe that they can make 
most money by cheating their customers; and the public 
at large believe all butchers equally dishonest and there- 
fore deal with the butcher nearest them. This stupidity 
is to a great extent justified. The art of the butcher con- 
sists in finding out to which customers he can sell third- 
class meat at first-class prices; 1 and as a rule, he is so 
successful in doing this that no butcher is ever known to 
fail. On the contrary, they all grow rich. This being 
the rule, the public is justified in giving up the expec- 
tation of being honestly served, so that it is only the 
most intelligent housewives who discover that there 
are butchers who do not have dishonest methods. Thus 
the stupidity of butchers and public tends to encourage 
the multiplicity of shops and keeps in the butcher business 
an enormously larger number than is necessary. If now 
we take into consideration that what is true of butchers 
is true of almost every dealer in the articles of food we 
consume, we shall appreciate how much waste of human 
effort there is in this business of distribution. But all 
this waste, encouraging stupidity in the customer and 
dishonesty in the retailer, is endorsed because it "makes 
character!" 

Last but not least is the loss of by-products that in- 
evitably results from manufacturing upon anything less 
than a gigantic scale. 

lf All good housekeepers know this by experience. I know it 
from the butchers themselves, who explained it in the course of an 
effort to arrange a combination of butchers in Paris. 



CAPITALISM IS WASTEFUL 99 

The managers of the Standard Oil Trust testify that 
among the waste products capable of being utilized in 
sufficiently large refineries are gasoline, paraffine, lubricat- 
ing oil, vaseline, naphtha, aniline dyes, and no less than 
two hundred drugs; and that the total value of these 
waste products is actually as great as that of the oil 
itself. 1 

Is or is not the contention with which this chapter 
started, justified? It was charged that the competitive 
system is stupid because wasteful and disorderly, and 
that it was unnecessarily immoral, unjust, and cruel. 
The testimony of men recognized as the highest author- 
ities has been produced to demonstrate its wastefulness: 

Waste of capital owing to bankruptcy, to working at 
irregular efficiency, to frequent change of dimension, to 
cost of "getting the market," to cross freights, to an- 
archy of distribution, to loss of by-products; 

Waste of human energy in the work of competition; 
and above all in unemployment leading to vagrancy and 
pauperism. 

And we need produce no testimony to prove things so 
obvious as the immorality, injustice, and cruelty of over- 
employment and unemployment and the necessary re- 
sults thereof: drunkenness, disease, pauperism, prostitu- 
tion, insanity, and crime. 

One word only still needs explanation: It has been 
stated that this immorality, injustice, and cruelty are 
" unnecessary." It is useless to rail at these things if 
they are necessary. Nature is often immoral, unjust and 
cruel. The survival of the few fit and the corresponding 
sacrifice of the many unfit has no justification in morality. 
Death, deformity, and disease are often both unjust and 

1 Testimony of Mr. Archbold (pp. 570-571) in the Report of the 
Industrial Commission, Vol. I, 1900. 



100 WHAT CAPITALISM IS 

cruel. Yet against these last we are in great part help- 
less. It is not enough to show that the competitive 
system results in evil; we have to demonstrate that these 
evils are avoidable; and that our remedy for them will 
not involve still greater evils. This belongs to the final 
chapters on Socialism; and is referred to here only to 
assure the reader that it has not been overlooked. 

Sufficient emphasis, however, has not yet been put 
upon the lack of order that characterizes the competitive 
system. 



CHAPTER III 
CAPITALISM IS DISORDERLY 

Nature is both orderly and disorderly. She is orderly, 
for example, in the general succession of her seasons, in 
the average rainfall, the average sunshine. She is orderly 
in the regular drawing of water from the ocean to the 
hills and the return of water from the hills to the ocean. 
But Nature is extremely disorderly in her detail. Some 
years rainfall is deficient and men starve because of 
drouth. Other years the sunshine is insufficient and men 
starve because of rain. The beneficent flow of water 
from the hills to the ocean is attended by disorder which 
is often calamitous; the river swells to a torrent in one 
place and spreads out to unwholesome marshes in another. 

The power of man to profit by the order of Nature and 
to adjust its disorder is an attribute that makes man 
almost divine; for this power exerts as great influence 
over the soul of man as over the matter of Nature. Man 
has demonstrated his control over Nature by protecting 
himself against deficiency of water through reservoirs, 
and against excess of rain through drainage; he has 
robbed torrents of their terrors by dykes, and made them 
his servants by irrigation; he drains the swamp and 
waters the desert. In one respect only has he failed to 
exercise as yet sufficient control; namely, the competitive 
system. The competitive system is applauded by Her- 
bert Spencer because he finds it in Nature. But Nature 

101 



102 WHAT CAPITALISM IS 

does not proceed only upon the competitive plan. She 
furnishes us with the beehive and anthill as types of 
cooperation, from which man can not only learn a lesson, 
but receive a warning; for the evils that attend the co- 
operative plan of the beehive are almost as great as those- 
that attend the competitive or predatory system. 1 What 
man then has to do is not blindly to follow Nature either 
as respects her competitive system or her cooperative 
system; but to do in this direction what he has done in 
others — profit by what is good and orderly in Nature 
and suppress what is evil and disorderly in it. 

§ 1. Anarchy of Production and Distribution 

The intelligent business man has been at work in 
suppressing the evils of the competitive system. He has 
found the waste and disorder attending unlimited com- 
petition so abominable that he has suppressed competi- 
tion to the utmost possible by the organization of trusts. 
It has been pointed out that the disorder attending our 
production and distribution gives rise to anarchy in both 
these departments of industry. As long as every man 
is free to produce exactly what he chooses — what he 
thinks will benefit him, there is no rational relation 
between supply and demand. 

(a) Tyranny of the Market 

This process is going on in every industry. Capital 
rushes away from business where there is no profit to 
business where there is profit. The result is that the 
capitalist generally discovers a demand for an article 
too late to profit by it, and does not discover that there 

1 " Government," Vol. I, p. 276. 



CAPITALISM IS DISORDERLY 103 

is no demand for an article until he is ruined by the dis- 
covery. The boasted " fluidity of capital" causes it 
to pour from one industry to another in obedience to 
what is called "the market"; and of all the despotisms 
that the folly of man has subjected him to, none for 
stupidity and pitilessness approaches the market. So 
long as there was no large-enough combination of capital 
to acquire knowledge of the supply and demand that 
determines market price or to any extent control it, no 
man, however intelligent, could tell when prices were 
going to rise and when to fall. And although the older 
economists loved to dwell upon the fluidity of labor as 
well as upon the fluidity of capital, they failed to take 
account of the bankruptcy that attends the one or the 
appalling conditions that attend the other. For when the 
supply of labor is large and factories are running at low 
capacity; when men and women are seeking employment, 
and the demand for labor is small, the effect of this law 
is to reduce wages below the rate necessary to support 
life; the unemployed are then reduced to a choice between 
the almshouse and starvation. 

This evil consequence is a matter over which isolated 
employers have little or no control; for the very same 
cause that reduces wages reduces also the price of goods. 
It is because the demand for goods is small that the 
manufacturer has to run his factory at a reduced capacity; 
and the demand being small, the manufacturer cannot 
get a remunerative price for his goods. Now the thing 
that reduces prices is competition, and the thing that 
reduces wages is competition, and the main source of 
every financial, commercial, and industrial disaster is 
competition. Employer and employee are alike sub- 
jected to the levelling principle. The moment a partic- 
ular manufacture is found to be profitable, and therefore 



104 WHAT CAPITALISM IS 

able to pay a high rate of wages, new factories are started 
and wages reduced by the competition of workingmen. 
The flow to this industry, therefore, of both capital and 
labor, inevitably reduces not only wages by the direct 
competition between, workingmen, but also the profit 
out of which high wages were originally paid. 

Employer, therefore, and employee are both slaves of 
the market; the employer cannot get more than the 
market price for his goods, and out of this he has to pay 
for his raw material, the cost of running the factory, and 
the wages of his men. He cannot reduce the price of 
raw material nor the cost of running the factory — rent, 
fuel, etc.; these too are determined by the market. 
The only thing he can reduce is wages: so he is driven 
to reduce wages or close his factory, for he cannot long 
run his factory at a loss. 

And so anarchy of production and anarchy of distribu- 
tion lead inevitably, as all anarchy does, to despotism — 
the despotism of the market. 

(b) Tyranny of the Trust 

Now trusts are an attempt of capital to escape from the 
tyranny of the market, to eliminate the waste of competi- 
tion and bring order in the place of disorder by making 
supply proportionate to demand. The testimony of 
John D. Rockefeller before the Industrial Commission 
is illuminating on this subject. In answer to Question 9, 
he says that he "ascribes the success of the Standard 
Oil to its consistent policy to make the volume of its 
business large" To Question 10, he says he did this 
"by cooperation, or what is the same thing, combination." 
But the necessity of keeping the volume of the business 
large made it indispensable to extend the market. He 



CAPITALISM IS DISORDERLY 105 

says "Dependent solely upon local business, we should 
have failed years ago. We were forced to extend our 
market and to seek for export trade. " "And so," he 
says, " the Standard Oil spared no expense in forcing its 
products into the markets of the world." 

The despotism of the market extends over the whole 
world. It is impossible for any one nation to organize 
its industry, or for the industry of any one nation to 
organize itself, under a world-wide competitive system, 
without taking into consideration the conditions of the 
world market. The Standard Oil could not maintain 
prices in competition with foreign oil. It had to carry 
the industrial war into Europe and Asia, and did this by 
eliminating competition at home; putting an end to 
anarchy of distribution as well as to anarchy of produc- 
tion; by transforming the whole system through the 
building of pipe lines, the use of tank cars and tank 
steamers, through an enormous aggregation of capital, 
and the use of every ingenious improvement. The 
Standard Oil succeeded in doing this and "receiving in 
return from foreign lands nearly $50,000,000 per 
year." 

Mr. Rockefeller is an adroit witness, and carefully re- 
frained from reference to the methods by which competi- 
tion was crushed as an indispensable preliminary to what 
he calls the "enlargement of the business." Mr. H. O. 
Havemeyer, President of the Sugar Trust, was more 
frank. Here is his testimony on this subject in full: 

Q. (By Senator Mallory) "Did I understand you to 
say — perhaps I may have misunderstood you a while 
ago — that it was your policy to make as much profit 
out of the consumer as you possibly could?" — A. "Con- 
sistent with business methods." 

Q. "Consistent with business principles. In other 



106 WHAT CAPITALISM IS 

words, your idea is that your organization, the American 
Sugar Refining Company, will, if it can, get the maximum 
profit out of its business from the consumer. Now, I 
also understood you to imply at least that it is the policy 
of the American Sugar Refining Company to crush out all 
competition if possible/' — A. "But that is not so; 
there is no such testimony. I understand it has been put 
in that form by one of the gentlemen here, but it is not 
the fact. What I said was that it was the policy of the 
American Sugar Refining Company to maintain and 
protect its trade, and if it resulted in crushing a competitor 
it is no concern of the American Company; if he gets in the 
press, that is his affair, not ours." 

Q. "And if anyone interferes with the business, 
profits, or competition of the American Sugar Refining 
Company, it is its policy to prevent it if possible?" — A. 
" By lowering profits to defy it." 

Q. "And if it results in crushing him out?" — A. 
(Interrupting) "That is his affair." 

Q. "Not the affair of the American Sugar Refining 
Company?"— A. "No." 

Q. "Now, suppose in the natural course of events 
the American Sugar Refining Company should suppress 
— we will not use the words ' crush out' — all competi- 
tion, all opposition. I understand from your theory — 
business principles — that you would then seek to get 
out of the public and consumer the largest amount of 
profit consistent with your idea of business principles?" — 
A. "Precisely." 

Q. "Then, if you had the power to charge or impose 
prices on the public, what would be your idea of the limit 
that the public could possibly stand?" — A. "I think it 
would stand a quarter of a cent to-day. I think we could 
do it for twenty cents a hundred. I think the country 



CAPITALISM IS DISORDERLY 107 

is really damaged by having a number of people in the 
business/ 7 

Q. "That is not an answer to my question. My 
question is the limit. What restraint would you put 
upon yourselves? What would be your restraint?" — A. 
" I call that restraint business consideration." 

Q. "Would it not be the utmost limit that the con- 
sumer would bear?" — A. "Until we had competition we 
should be in that position, but whether or not we would 
exercise it, is quite another matter." 

The very effort of Mr. Havemeyer to disown the " policy 
of crushing out competition" followed immediately by 
his admission that a trust is a "press" built for that pur- 
pose, is indicative of the capitalist's mind on the sub- 
ject: At one moment he naively admits what a moment 
before he emphatically denied. The trust, then, is the 
organization of an industry by one or a few men strong 
enough to suppress competition and bleed the consumer. 

The tyranny of the market has been suppressed only 
to substitute therefor the tyranny of the trust. And 
this new tyranny has for effect to enrich the trust magnate 
at the expense of the whole nation. 

The course of industrial events beginning with the 
creation of guilds to suppress the anarchy of the Middle 
Ages; the tyranny of the guilds; the revolt against the 
guild; its suppression; the substitution therefor of so- 
called freedom of industry, of contract, of trade; the 
disorder or anarchy that ensued; the despotism of the 
market; the gradual suppression of all three freedoms 
in order to escape from the despotism of the market; 
and this suppression only preparing the way for the 
tyranny of the trust, is not accidental. It is a cycle 
through which industry had to pass till mankind found 
its way of escaping from the whirlpool. 



108 WHAT CAPITALISM IS 

We find the same cycle in the political world. The 
anarchy of the horde paving the way to the despotism 
of the tyrant; the despotism of the tyrant creating a 
revolt resulting in a new anarchy leading to another 
despotism as bad as the last, until staggering between 
anarchy and despotism, men slowly evolved a system of 
popular government. We shall see later that popular 
government can never remain popular under a system 
of industrial anarchy or industrial despotism, and that 
our industrial organization must adopt a system of 
popular control, if popular government is ever to become 
in fact as well as in name, popular. 

Suffice it to point out that our industrial development 
following a law of necessity has so far staggered like a 
drunken man from anarchy to despotism and from 
despotism to anarchy — and that we are not likely to 
attain order from despotism until we recognize that the 
competitive system, such as we now have, can never 
attain it; and that it can be attained only by a deliberate 
substitution of cooperation for competition to the extent 
necessary. 

(c) Tyranny of the Union 

Let us now consider another part of the industrial 
field which seems destined to be the arena of the next 
great development — the field of labor. 

The consumer is not organized as yet; he has not 
waked up to the extent to which he is fleeced by the trust. 
But labor is organized, driven to organization by the 
terrible consequences of the freedom of contract x for 
which he clamored so loud in the Revolutionary period. 
A workingman alone, ignorant of the profits earned by 

1 Book II, Chapter IV. 



CAPITALISM IS DISORDERLY 109 

the manufacturer, ignorant of the number of workingmen 
applying for work, himself hungry, and with a hungry 
family to support, is no match for an employer with 
sufficient capital at his disposal, a considerable knowledge 
of the labor market where he can find men to replace 
such as ask for a higher wage than he is willing to pay, 
and with practically no reason to fear hunger or even 
discomfort for himself or for those who are dear to him. 

Freedom of contract, therefore, meant for the un- 
organized workingman at the beginning of the nineteenth 
century, not freedom, but slavery. It will be later re- 
corded how inevitably the tyranny of the market and the 
greed of capital combined to reduce workingmen to 
starvation wages and condemn women and children to 
degrading labor. One of two things had to happen: 
The whole laboring class had to be reduced to a condi- 
tion of permanent slavery, or the laboring class had to 
combine to put an end to competition between worker 
and worker that left them at the mercy of the market. 
That men reduced to the physical condition created by the 
industrialism of a century ago should have had the in- 
telligence, courage, and self-restraint to combine and act 
in concert until they were able to some extent to impose 
rates of wages upon the employers, seems to-day hardly 
less than miraculous, and ought to serve as a warning to 
capitalists that they can no longer dispute the coming 
political power of such workingmen, or remain indifferent 
to it, or even denounce it with Outlook intemperateness. 

Mr. Eliot, President Emeritus of Harvard University, is 
outraged by what he regards as the tyranny of the trade 
union. Has he ever thought of the tyranny of the trust, 
or the tyranny of the market from which both inevitably 
spring? Has he ever understood that such a competitive 
system as ours can only put an end to anarchy by des- 



110 WHAT CAPITALISM IS 

potism; and can only shake off despotism at the risk 
of anarchy? 

But the subject of trusts and trade unions is too large 
to be treated as an incident in the discussion of the evils 
of the competitive system. I shall content myself, 
therefore, with summing up briefly the course of events 
through which industrial development has passed, for 
the light it throws upon the course through which it has 
still to pass: 

Anarchy of industrial conditions during the Middle 
Ages gave rise to the guild, which for a season substituted 
order for disorder. 

The order introduced by the guild involved regulation; 
regulation involves power; and wherever power is exercised 
free from efficient popular control, it must end in tyranny. 

The tyranny of the guild aroused a revolt and the cry 
of freedom of trade, freedom of industry, freedom of 
contract; these three freedoms under the competitive 
system reintroduced an era of anarchy— both in pro- 
duction and distribution — both for the employer and the 
employee, subject only to the despotism of the market. 

The employees undertook to put an end to competi- 
tion between employees by organizing trade unions. 

The employers undertook to put an end to competition 
between employers by organizing trusts. 

So the anarchy which, under the competitive system, 
must result from freedom, has given rise to the tyranny 
of the market, and the effort to escape the tyranny of the 
market to two other tyrannies — of the trust and of the 
trade union. These two tyrannies stand to-day not only 
arrayed against one another, but in the bitterest con- 
flict — in the courts, in strikes, lockouts, and ultimately 
on the field of politics. 

One thing stands out in singular relief from the fore- 



CAPITALISM IS DISORDERLY 111 

going sketch, viz., that it is freedom — of industry, of con- 
tract, and of trade — the battle cry both of the bourgeois 
employer and the proletarian employee — that has led 
to these two tyrannies. 

At the present time I believe that the confusion in the 
ranks not only of the employer, but of the employee, as 
regards this so-called freedom — a freedom tnat both are 
clamoring for but neither have ever attained — is respon- 
sible for the failure of both to understand one another. 
And the subject of freedom or liberty will therefore be 
discussed in a chapter to itself. 



CHAPTER TV 
PROPERTY AND LIBERTY 

The savage in a savage country, free from all con- 
straint of law, custom, or government, must, I suppose, 
be admitted to enjoy the greatest freedom conceivable. 
He is free to hunt what animals he chooses; to pick the 
fruits of the earth; to gather the shells by the seashore. 
He is free also to till any part of the land if he knows how 
to do it; to sow and harvest it. He is also free to rob 
his fellow men; to enslave them; to kill them and, if his 
tastes so incline, to eat them. 

But such a savage, while enjoying the greatest freedom 
conceivable, is also exposed to the greatest risk con- 
ceivable; for example, he is exposed to the risk of having 
the animals he hunts taken from him by one stronger 
than he; if he tills the ground and reaps the harvest, he 
is liable to have that harvest taken from him; and 
though he is free to rob, enslave, kill, and eat his 
fellow men, his fellow men are equally free to rob, 
enslave, kill, and eat him. 

The same thing, of course, is true of his domestic rela- 
tions. He may capture any female he likes and compel 
her to serve as his wife; but he is liable at any time to 
have his wife taken from him. As regards his physical 
and domestic needs, therefore, while he enjoys the greatest 
freedom possible, he is exposed to the greatest risk also. 

112 

I 



PROPERTY AND LIBERTY 113 



§ 1. Origin of Property 

It may be said for this order of things, if things can be 
said to have order where there is no order, that the strong 
men would prefer this system to one under which they 
would be limited as to the satisfaction of appetite, passion, 
and caprice. But the strongest men are liable to be 
subdued by a sufficient number of weaker men, as Poly- 
phemus was subdued by Ulysses and his crew. So the 
strong men in the community as well as the weak, early 
discovered the importance of agreeing to respect each one 
the rights of the other in the things which through their 
labor they had acquired. Long, then, before there was 
any system of written law, our savage ancestors recognized 
the right of men in the product of their toil; and this 
recognition, whether we find it in the Ten Commandments 
of the Jews, or the Twelve Tables of the Romans, or in 
the customs of more savage races, is nothing more nor 
less than the institution of property. 

Although this institution of property involves an 
abridgment of freedom — for under the property system 
nobody is free to rob another — nevertheless it is an 
abridgment of freedom by which everyone except the 
lazy profits; and it tends to put an end to laziness, be- 
cause, under this institution of property, only those who 
work can eat. 

It is because the institution of property is an abridg- 
ment of freedom that property and liberty are treated 
together in this chapter. It is impossible correctly to 
understand the one without the other. It will be seen 
later that as civilization develops and men are crowded 
together in a small space, it becomes indispensable to the 
convenience of all that freedom should be further abridged; 



114 WHAT CAPITALISM IS 

and that so long as the freedom of the individual is 
abridged, not only for the benefit of his neighbors, but 
of himself, the abridgment is a good thing and not a 
bad. Whereas, when we find freedom being abridged 
to the disadvantage of the many and the advantage of 
a few, then it will turn out that this abridgment is a bad 
thing and not a good. 

One feature about the abridgment of freedom it is 
impossible to emphasize too much: In nations in which 
liberty is supposed most to prevail, the abridgment of 
freedom is for the most part confined to matters which 
involve little or no sacrifice. For example, the average 
citizen does not find himself in the slightest degree ham- 
pered by the criminal code; he does not want to kill or 
rob; it is perfectly clear to him that the sacrifice he makes 
of his freedom to kill or rob is of no importance by the 
side of the enormous security he receives as regards those 
people who might want to kill or rob him. 

Socialism has been much injured by certain fanciful 
writers who have suggested various abridgments of 
human freedom that would be altogether abominable; 
as for example, the undue limitation of a man's liberty 
to choose his wife, and to choose his occupation. And 
opponents of Socialism use these totally discredited sug- 
gestions as weapons with which to fight Socialism; though 
in fact, modern Socialism repudiates them altogether. 

The institution of property, in abridging freedom, 
creates duties; and in furnishing security, establishes 
rights. Thus we say that men have a right of property 
in the product of their toil; a right to enjoy the cabins 
they have built; a right to harvest the grain they have 
sown. And the same thing can be said of rights and 
duties as has been said about the abridgment of freedom. 
So long as no man exacts rights of property in anything 



PROPERTY AND LIBERTY 115 

more than the result of his labor, so long is he only asking 
what is due to him. 

And the institution of property in the product of men's 
toil is not only justified by convenience, but is also 
ordered by religion. It is only economic expression of the 
Golden Rule: "Do unto others as you would that they 
should do unto you;" or "I shall respect your right to the 
cabin you have built, as I expect you to respect my right 
to the cabin I have built." 

Moreover, even though this were not the rule imposed 
by religion, it is a rule imposed by the principle of the 
survival of the fit. In the conflict between races, those 
races in which rights of property were respected were 
bound to prevail over those in which these rights were not 
respected, because respect for rights of property such as 
these is the only condition upon which a race can become 
prosperous, accumulate wealth, strength, and all the 
resources that enable one race successfully to fight with 
another. And here we see the first reconciliation between 
religion and science. Both teach exactly the same thing; 
that is to say, the Golden Rule. 

In one sense the institution of property abridges 
freedom. In another sense it enlarges it. For if a man 
has not only to kill his game, but to protect it from others, 
he is a slave to the game he has killed until he has eaten 
it. Whereas if the community in which he lives has 
adopted the institution of property and respects it, he 
can leave his game unprotected, and has leisure therefore 
for other occupation. It will be seen ultimately that if 
the institution of property were confined to the product 
of men's toil, the increase of knowledge of the last few 
centuries would permit of another enormous enlargement 
of freedom, for it would permit of the organization of 
labor in such a manner that the work of securing the 



116 WHAT CAPITALISM IS 

necessaries of life that now costs the savage all his time, 
and the workingman of to-day between eight and twelve 
hours of his day, need really only cost him a comparatively 
insignificant fraction of it. But the demonstration of 
this must be left until later. 1 

We have seen, therefore, that so long as property is 
confined to the product of men's toil, all is well. The 
freedom of a savage life which exposed every man to 
being robbed by every other man is what we call license. 
The freedom, on the contrary, under the institution of 
property which secures to men the product of their toil, 
we may call liberty — liberty being freedom secured by 
law. 

"Legum omnes servi sumus, ut liberi esse possumus." 2 

However simple the idea of property of men in the 
product of their toil may seem to be, it has in practical 
life never yet been realized. There are many reasons 
for this. 

If a community were to attempt to-day to divide its 
available land into tracts of just the size each one could 
himself cultivate, results would very soon demonstrate 
that such a division is a physical impossibility. Land 
varies much in fertility, and the amount of labor necessary 
to cultivate one acre of land is very different from that 
necessary to cultivate another acre of land. Men differ 
in their ability to cultivate. One lacks strength; an- 
other intelligence — indeed, some lack intelligence so much 
that they can never successfully cultivate their own land, 
and these naturally become the employees of those who 
can. Again, cultivation of land leaves nothing for a man 
to do for a part of the year, and gives him a great deal 
more than one man can do during the rest of the year. 

1 Book III, Chapter II. 

2 Cicero, tl Pro Cluentio," sec. 53. 



PROPERTY AND LIBERTY 117 

It is impossible, therefore, to divide up the available land 
of any community into parts which will mathematically 
or even approximately correspond with the amount of 
work that each man can do during the year. Then, too, 
the men who render great services to the community 
seem entitled to larger buildings, better accommodations, 
more ease and comfort, more personal service than those 
who render no service beyond simply the day's work 
upon land. We find ourselves confronted immediately 
by the enormous difficulty that results from the inequality 
of land and the inequality of men, in any attempt to 
frame a society which will even approximately assure 
to every man the product of his own labor. These are 
inherent difficulties which no statesman can disregard. 
These difficulties have been enormously increased by 
the selfishness, the intelligence, the violence, and the 
craft of men, which have been used to secure to some 
such large tracts of land that the majority were left 
without land altogether. And this system tends to be 
perpetuated by the natural and laudable desire of 
every man to leave his children after his death as well 
off as himself, thus creating laws regarding testacy and 
intestacy of a character to secure this. But the satis- 
faction of this laudable paternal instinct has had 
a bad effect upon the community; for, whereas we are 
all disposed to allow to every man the property which 
he has accumulated himself, even though this accu- 
mulation confers upon him larger wealth than his 
services warrant, we cannot but feel it improper that 
his issue, who may be altogether worthless persons, should 
be enabled through the success of their skilful ancestor 
to lead lives of idleness and even profligacy from genera- 
tion to generation. We are all, for example, outraged to 
think that because John Jacob Astor over a century ago 



118 WHAT CAPITALISM IS 

had the forethought to invest his earnings in New York 
real estate, his descendant, William Waldorf Astor, should 
to-day, though he has abjured his American nationality 
and thereby escapes the payment of personal taxes, never- 
theless receive millions annually arising from property 
which has increased in value through the labor of Amer- 
icans and not through any labor of his own. 

Thus we find that owing to inherent physical difficulties 
such as the inequality of land and the inequality of men, 
and owing to moral difficulties some of which are rep- 
rehensible, as for example, avarice and violence; and 
others commendable, such as intelligence and love of 
offspring, notions of property have become altogether 
different in fact from what they are in theory. Rights 
of property are not confined to the product of men's toil, 
but cover all those things which a family has been enabled 
under the law to accumulate whether by good deeds or 
by bad. This has given rise to two well-defined classes — 
one very small which owns land, and the other very large 
which owns no land. And the fact that the small class 
owns land and the large one does not own it, makes the 
latter dependent upon the former. 

Much the same thing has taken place as regards per- 
sonal property. Relatively few men have secured con- 
trol of the great industries of the country, and are thereby 
in a position to dictate who shall work at these industries, 
and as to the wages and conditions under which the work 
shall be done. 

Economically, therefore, the world can be divided into 
two sets of people — a small set that owns the land and 
controls our industries; and an enormous number of 
people dependent upon these; that is to say, the vast 
majority can only work at these industries upon the con- 
ditions imposed by a relatively insignificant minority. 



PROPERTY AND LIBERTY 119 

The institution of property, therefore, originally 
destined to assure to men the product of their toil, has 
altogether changed in character, so that it — on the con- 
trary — puts a very few men in a position where they can 
exploit the labor of the rest. 

A study of property and liberty cannot be separated 
from a study of government, because the institution of 
property involves the idea of law, and of a government 
to enforce the law. So long as no man seeks to secure 
more property than the product of his labor, the amount 
of government necessary to enforce the law need be but 
small — only just enough to compel the lazy to work and 
to prevent them from stealing. But the moment the 
institution of property is extended to cover more than 
the product of labor, government has to be harsh; for 
as this perverted notion of property creates a small 
propertied class and a large proletariat, it is obvious that 
the government has to be bolstered by a powerful .organ- 
ization of law courts, prisons, army, and police in order 
to enable a very small minority to coerce a very large 
majority. In fact, in our ancient civilizations the prop- 
ertied class consisted of either priests, soldiers, or both. 
In the case of the priests, it was the domination of superior 
intelligence over unintelligent superstition; and in the 
case of the soldiers, it was the domination of organized 
force. Now, if the small propertied class which controlled 
the government had governed well, or indeed had gov- 
erned without grossly outraging the governed, the whole 
development of man might have been different. But it 
is not in human nature for a few men possessed of auto- 
cratic power to use that power wisely. There are excep- 
tional periods in the history of the world when autocratic 
power has been used wisely; but in the long run the 
opportunities furnished by unlimited power to the evil 



120 WHAT CAPITALISM IS 

propensities in men are certain to result in gross in- 
justice. Such is the testimony of history. 

Now if the few in the exploitation of the many had 
shown as much temperance and wisdom as our ranch- 
men show to their cattle — and this God knows is not 
much — the few might have enjoyed their liberty at the 
expense of the many for an indefinite period. But they 
have shown so little of either that in the State of New 
York our official Labor Bulletin publishes that there 
have been for two years past about 200,000 breadwinners 
unable to earn the means of subsistence, and this means 
— on the generally admitted average of four dependents 
(aged, infirm, women, and children) to every breadwinner 
— a million human beings on the verge of starvation for 
no fault of their own. And as the population of New 
York is about one-tenth that of the whole country, it 
would seem as though in this great, wealthy, prosperous 
nation of ours freedom spells for some ten millions of 
people freedom only to starve. 

And as these ten millions are not cattle, but men and 
women with hearts and brains, armed with a vote and 
carefully — nay, compulsorily — educated to use this vote 
effectually, it does seem a little foolish to imagine that 
they will continue indefinitely to tolerate these con- 
ditions, if they can be changed. 

So not only by the unfortunate majority, but also by 
some of the fortunate minority who have bowels of com- 
passion, the question is being asked with insistence whether 
these conditions may not be changed and if so how. 

Conspicuous among the evils that have resulted from 
misgovernment by the propertied class, are personal ' 
slavery and political despotism. And the history of the 
world may be summed up as the effort of the majority 
to escape from these two evils, 



PROPERTY AND LIBERTY 121 

One reason why men have confused ideas about liberty 
is that they have not carefully distinguished the various 
phases through which this conflict has passed; for there 
are three kinds of liberty, all of which are singularly inter- 
woven one with the other and yet each of which is dis- 
tinctly different from the other. 

There is personal liberty; that is, freedom from physical 
restraint. In all civilized countries, personal liberty 
has been, to a large measure, secured. Slavery, except 
in some parts of Africa, is practically unknown, and every 
individual is protected from arbitrary arrest west of 
Russia. 

Next comes political liberty, which in so-called popular 
governments w T e are supposed to enjoy; that is, we are 
supposed to be no longer subject to autocratic govern- 
ment; we are supposed each to have a voice in determin- 
ing who are to govern us and what are to be the laws under 
which we are to be governed. It will be seen later on 
that this so-called political liberty is, in fact, enjoyed 
only by a very few people in any country of the world, 
though universal franchise seems to assure it to all. 

Third and last, there is economic liberty; that is, 
freedom to earn one's living. We have seen that the 
lawless savage enjoys economic freedom. There is no 
restraint whatever upon him in procuring those things 
which he needs — whether food, clothing, or shelter. 
We have also seen that his position was immensely im- 
proved by the institution of property in the product of 
toil, for under this definition of property he practically 
enjoyed security and retained all the freedom previously 
enjoyed except the freedom to rob; and he enjoyed 
thereby a larger freedom because he did not have to keep 
perpetual watch over the things he had hunted or pro- 
duced. 



122 WHAT CAPITALISM IS 



i 



But the moment the land was appropriated by a few 
men so that the majority could not work on the land 
except as the wage servants of the propertied class, then 
economic liberty came to an end; for no man can be con- 
sidered economically free if he depends upon some other" 
man not only for the means of subsistence, but for oppor- 
tunity to work in order to earn the means of subsistence. 
This economic dependence, due to the appropriation of 
land by a class, results in a loss of all the other liberties; 
for the franchise is of no value to a man every waking 
hour of whose day has to be spent in earning a wage just 
sufficient to support himself and his family. A vote can 
only be effectually exercised if directed by a political 
education sufficient to understand the political problems 
of the day, and if combined with other votes in a political 
organization sufficient to carry out the collective will 
of the people. The facility with which the Republican 
and Democratic parties have divided the vote of the 
proletariat is mainly due, I think, to the fact that the 
proletariat is too exhausted by overwork to undertake 
political organization, though it is beginning now to under- 
stand the necessity for doing so. 

Last, but not least, a man cannot be regarded as enjoy- 
ing liberty to any appreciable extent if his actions during 
all the waking hours of the day are determined, not by 
his own free will, but by the factory bell. 

And although it may be necessary to secure personal 
and political liberty before economic liberty can be at- 
tained, it is certain that until economic liberty be at- 
tained, neither political nor personal liberty is effectually 
enjoyed. This subject will be treated at greater length 
when we study the Political Aspect of Socialism. 1 The 
point which it is essential to keep clearly in mind now is 

1 Book III, Chapter III. 



PROPERTY AND LIBERTY 123 

that there are two notions of property, one of which is 
beneficent, and furnishes a maximum of security and a 
maximum of liberty; the other of which is unjust, and 
furnishes neither security nor liberty except to the 
privileged few. The first is the theory that men are 
entitled to property in the product of their labor; the 
second is that men are entitled to property in things 
which are not the product of their labor. 

The most conspicuous of these things is land, which of 
course is not the product of any man's labor, but the 
gift of Nature or God to the whole race, or in America to 
Americans — certainly not to the Englishman, W. W. 
Astor, for instance. And the appropriation by a few men 
of all the tools of production — the factories, water power, 
steam power, electric power, and of the great natural 
monopolies such as railroads, telegraphs, telephones, 
tramways, gas, etc., has had just as bad a result as the 
appropriation of land, for it has brought about exactly 
the same condition — the exploitation of the many by the 
few. This is the point which Henry George has over- 
looked, and it is a failure to appreciate this fact that 
principally occasions the differences between Single 
Taxers and Socialists. Private ownership of land by a 
few was doubtless in its origin an act of spoliation; whereas 
private ownership of factories and natural monopolies 
was the result of the application of intelligence and labor 
to the organization of industry. The latter, therefore, 
seems relatively justifiable, whereas the first is not justifi- 
able. But if the effect of the latter is as bad for the 
community as that of the former, and if there can be no 
escape from this system of exploitation except by readjust- 
ing property in factories as well as property in land, 
does it not seem evident that both must equally be faced? 

At this point it may be well to point out that sound 



124 WHAT CAPITALISM IS 

Socialism does not endorse such exaggeration as Proud- 
hon's "La propriete est le vol" — " Property is theft/' 
though there may be Socialists who do. On the con- 
trary, the fundamental basis of sound Socialism is the 
distinction between property in the product of men's 
own toil and property in the product of other men's 
toil. The one is altogether just and beneficial; the other 
is unjust and detrimental. 

Nor does Socialism fail to take into account the un- 
doubted fact that much land and many factories represent 
to-day an investment of accumulated wages; and that to 
expropriate such land without compensation would be 
as unjust an act of spoliation as the seizure of land by 
violence or the enclosing of commons by craft. 

On the contrary, Socialism recognizes that the problem 
of how to readjust property so as to secure to men the 
full product of their toil is of great difficulty and can only 
be solved by the application thereto of the highest delib- 
eration and wisdom. It appeals, therefore, to those who 
have knowledge and those who have experience, those 
who have studied and those who have suffered, con- 
vinced that it is by uniting knowledge and experience and 
not by disuniting them that the solution can best be 
attained. 

We are now in a position to complete what has been said 
on the subject of liberty. 

Liberty is defined in all our dictionaries as "freedom 
from restraint." 

But it may be truly said that there is no such thing as 
universal freedom from restraint. There may be indeed 
freedom from restraint of man by man. But we remain 
under restraint to Nature owing to our natural needs. 
That is to say, we are not free to spend our time as we 
wish, for our natural needs compel us to devote our time 



PROPERTY AND LIBERTY 125 

to securing shelter, clothing, and food. So also there 
may be partial freedom from the restraint of Nature; 
but only upon the condition of restraint of man by man, 
a restraint which under existing conditions bestows 
inordinate and generally unhappy leisure upon a few at 
the expense of all the rest. We have therefore to rec- 
ognize two kinds of restraint : 

Natural restraint due to our needs, which makes us 

slaves to things — shelter, clothing, and food; 

Human restraint, exercised by one man over another, 

that puts some men under restraint to others. 

Again, the kind of freedom from restraint that exists 
in the savage state is incompatible with two very precious 
things — security and leisure; and there are two kinds 
of insecurity, corresponding to the two kinds of restraint 
just mentioned: 

I. Insecurity that arises from our own needs — food, 
shelter, clothing, etc. 

II. Insecurity that arises from the needs of others — 
theft, slavery, despotism, etc. 

The first — insecurity arising from our own needs — 
tends to make us slaves to things. 

The second — insecurity arising from the needs of others 
— tends to make us slaves to people. 

In the savage state or state of Nature, this insecurity 
is at a maximum. A savage is a slave to his needs to 
such an extent that in any climate save the tropics, he 
has to devote all his time to satisfying them. And he is 
liable to be robbed or reduced to slavery by men stronger 
than he. 

It was to rescue himself from this insecurity that man 
created the institution of property — of priceless value, 
it assured to men the product of their labor and did not 
encourage one man to exploit the labor of another. And 



126 WHAT CAPITALISM IS 

for the same purpose man instituted law; that is, the 
power for enforcing these rules — both also of priceless 
value so long as they furnished security and the leisure 
that results therefrom. 

It was inevitable, however, that, owing to inequalities 
of men and of things, the very system instituted to give 
security, liberty, and leisure to all, should end by giving 
security, liberty, and leisure to a few at the expense of 
the many. 

Property, therefore, came to include two very different 
principles: 

I. That men should securely enjoy the product of 
their toil. This is believed by Socialists to be the 
desirable principle of property. 

II. That a few should without any toil enjoy the 
products of the toil of the majority. This is the 
principle of property that actually prevails to-day. 
Now the bourgeois claims that the first or desirable 

principle of property is unattainable and that the second 
is the only practical system. This is the whole question 
we have to discuss. 

I think that if we carefully reduce to its simplest terms 
the effort of civilization to make men happy it will be 
found to be this: 

It seeks to rescue men from the two restraints under 
which they labor in a savage state : 

Natural restraint due to our needs, i.e., shelter, cloth- 
ing, food, etc. 

Human restraint due to the needs of others, i.e., theft, 
violence, slavery, despotism, etc. 

In other words, it seeks to secure for men Liberty, which, 
properly understood, is emancipation from these two re- 
straints. And the blessings that ought to follow such 
liberty as this are two-fold: Security and leisure. So 



PROPERTY AND LIBERTY 127 

that liberty, security, and leisure may be described as the 
Trinity of human happiness; and all the more justly 
because just as it is from the First Person of the Holy 
Trinity that the other Two emerge, so it is from liberty 
that we get security and leisure. 

The real issue between the bourgeois and the Socialist 
is then reduced to the following: 

Can security, liberty, and leisure be enjoyed only by a 
few at the expense of the many? Or can they be en- 
joyed equally by all? 

I am glad in this connection to use the word "enjoyed/ 7 
because this word assumes — as indeed the w T hole bour- 
geois philosophy assumes — that the few not only have 
security, liberty, and leisure, but that they "enjoy" 
them; whereas I think it can be demonstrated that only 
the worthless few have leisure and that they do not enjoy 
it, and that neither the industrious nor the worthless have 
liberty or security at all. In other words, the few in 
grasping at these things at the expense of the many 
enjoy none of them because of the hard fact of human 
solidarity, which will drive them at last to reconsider 
all these things. But this belongs to the subject of 
Solidarity and cannot therefore be elaborated in this 
chapter. 

The essential thing to be kept in mind is that the only 
liberty worth having is one that will rescue us from both 
kinds of restraints — natural and human; that it is quite 
useless to throw off human restraint and fall back into 
the condition of natural slavery which seems to be the 
policy of the anarchist; nor is it of any advantage to 
escape from natural slavery only to become a prey to 
human despotism or exploitation, according to the creed 
of the bourgeois. Socialism is the juste milieu between 
Let-alone-ism on the one hand and Anarchism on the 



128 WHAT CAPITALISM IS 

other. Liberty, to be worth having, must secure the 
greatest emancipation from both restraints possible. 

If we apply this notion of liberty to existing condi- 
tions, I think we shall come to the following conclusion: 

From natural slavery created by men's needs it was 
impossible for the race to escape, except by the system 
which actually prevails — of making the un wealthy major- 
ity work for the wealthy few. This results in pauperism, 
prostitution, and crime. 

Slavery to Nature in a natural or savage state practically 
condemns savages to devote their whole time to pro- 
curing the necessaries of life, and to protecting these 
things, once procured, from the spoliation of their neigh- 
bors. A great stride in the progress of humanity was 
made when savages began each to respect the product 
of the other's toil. And if this system could have pre- 
vailed, our late advance in science and our consequent 
control of Nature would secure us two priceless advan- 
tages: one, security from spoliation; the other, an 
organization of labor that would reduce the hours every 
man would have to spend in procuring the necessaries 
and comforts of life to a very small fraction of the work- 
ing day. The results in leisure that would accrue under 
a cooperative system will be explained later; 1 but at 
this point it seems only necessary to indicate that if a 
man need devote only three or four hours during the 
working days of his life to satisfying his needs, he would 
have most of his waking hours to devote to social service, 
literature, art, music, or amusement, to an understanding 
of his political and economic problems, and to the political 
organization necessary to secure popular control over 
government for the first time in the history of the world. 
Every reform movement in New York has failed because 

1 Book III, Chapter V. Economic Aspect. 



PROPERTY AND LIBERTY 129 

men who wanted reform did not have the leisure to give 
to it; and the reform movement was therefore left to 
those who devoted their whole time to it in order to share 
the plunder on the day of victory. In other words, 
every reform movement if successful resulted in a political 
machine animated by selfish motives and therefore as 
bad as other political machines similarly animated. When 
every man has time to protect his business interests in 
the government; when these business interests are not 
hostile to the general welfare, but coincide with it; and 
when politics is the business of every man instead of 
being as now the business of a few professional politicians, 
then for the first time this world will see a veritable 
democracy. 

Liberty, security, and leisure seem to me altogether 
the most important things that we can attain through 
a oorrect understanding of property. But owing to 
false notions of property created by the few who have 
acquired all the property at the expense of their fellow- 
citizens, there have arisen artificial conditions which 
have created what may be called artificial slavery; that 
is to say, personal dependence, political dependence, and 
economic dependence. Of these three the last is the most 
important because, in consequence of it, neither per- 
sonal nor political independence is effectually enjoyed. 
That these three forms of dependence are unnecessary 
and are due to false notions of property which can be 
slowly eradicated, is the belief of the Socialist. It is 
also his belief that the very changes that will put an end 
to these three forms of dependence will also set up true 
notions of property instead of false, and thereby secure 
the priceless benefits of liberty and security on the one 
hand and of leisure on the other. 

In other words, Socialism proposes not to abolish 



130 WHAT CAPITALISM IS 

property, but to reinstate it; to relieve the rich from the 
insecurity and hatred to which they are now exposed; 
to rescue them from slavery to wealth and ennui] to 
confer upon them the immense consolation of knowing 
that what they enjoy is at the expense of no one; that 
it commits none to pauperism, prostitution, or crime; 
that it is earned by social service, the only service worth 
doing; that the consideration they enjoy is due to their 
own merits and not to inherited or ill-gotten wealth; 
and to accomplish this by securing to all men the product 
of their toil; by restoring property to the consideration 
to which it is entitled; by furnishing to every man the 
maximum of liberty, security, and leisure. 



CHAPTER V 
THE RESULTS OF PROPERTY 

Not only did Proudhon make a great mistake in con- 
demning all property, but some Socialists still make the 
same mistake; for property even in its worst form has 
rendered humanity an indispensable service. It is the 
cocoon which the human chrysalis has instinctively wound 
around itself for protection while it is changing from a 
lower to a higher stage of development. 

For example, property even in its worst form — that is, 
property that puts one man in a position to exploit the 
labor of another man — has encouraged the intelligent 
and industrious to accumulate wealth; and the accumula- 
tion of wealth makes economic development possible; 
for if a man produced no more than was necessary for the 
support of himself and his family, there would be no 
surplus out of which to support those engaged in the 
development of national resources — for example, the 
building of roads, the building of railroads, the building 
of factories, the exploitation of mines. Every progress- 
ing nation has got to have two totally different resources — 
the resources necessary to support that part of the popula- 
tion which is engaged in production and distribution — 
that is, in keeping the community alive; and the re- 
sources accumulated for supporting those who are develop- 
ing the country; for example, the building of roads, etc. 
Obviously, therefore, it is indispensable that more be 

131 



132 WHAT CAPITALISM IS 

produced every year than is necessary for the support 
of those engaged in production and distribution; enough 
must be produced to support also those engaged in build- 
ing roads, factories, etc. 

Indeed little can be done in developing a country until 
a certain amount of commodities has been accumulated 
for this purpose. Now the accumulated resources ap- 
plicable to development form what is called capital — 
which, in the hands of a few persons, permits of those 
few exploiting the rest; but in the hands of the producers 
themselves, will permit of a better development without 
the evil results of exploitation. It is alleged by opponents 
of Socialists that Socialism proposes to abolish wealth 
or capital. It is inconceivable that men supposed to be 
educated — such as Roosevelt, Taft, Bryan — should be 
so ignorant in a matter concerning which it is their 
peculiar duty to be informed. No cabinet minister in 
England, Germany, or France would be capable of such 
a mistake. 1 In Europe statesmen take the trouble to 
study Socialism and thus avoid making themselves 
ridiculous by such a blunder as believing that Socialism 
proposes to destroy or abolish wealth. Far from wishing 
to abolish wealth, Socialism seeks to enhance it — to 
consecrate it — to put it beyond the reach of private 
avarice or public discontent. How they expect to do 
this will be explained later. Meanwhile, it is important 
to keep clearly in mind the fact that it is not wealth that 
Socialists denounce, but the present distribution of 
wealth. This explains why well-informed Socialists are 
the first to recognize the beneficent role which the in- 
stitution of private property even in its worst form has 
played in stimulating accumulation. 

1 Since writing this I see that Jaures makes exactly the same 
observation in Van Nor den's Magazine, August, 1909. 



THE RESULTS OF PROPERTY 133 

Here again, whether property was instituted for the 
deliberate purpose of stimulating accumulation or not, 
we see once more evolution favoring the survival of those 
nations who did accumulate at the expense of those who 
did not. In a conflict between tw r o tribes, it was the 
tribe provided with the larger store of good weapons and 
food that must eventually prevail over the tribe less well 
provided with these. And so evolution has pushed men 
in the direction of accumulating wealth because it de- 
stroyed those tribes which did not accumulate it and 
allowed the survival only of those who did. 

This accumulation of wealth involved two qualities 
of predominating importance in human development, 
the exercise of forethought and self-restraint. If we com- 
pare man with the lower animals we find that there are no 
qualities in which he differs more from them than in these 
two. Man is capable of deliberate self-restraint. And 
the nations most capable of forethought and self-restraint 
have prevailed over nations which have been less capable 
of these. Here again, it may be incidentally pointed 
out that in no respect was the institution of property 
more important to human development than in the 
recognition of the kind of property which a man orig- 
inally had in his wife and children; and the more the 
domestic relations created by this property required 
exercise of self-restraint, the more the nations having 
these institutions prevailed over those which did not 
have them. 

The systematic survival first of patriarchal tribes over 
metronymic tribes, 1 and secondly, of monogamous tribes 

1 The metronymic tribes were tribes in which there was practi- 
cally no paternal relation. The mother was the head of the family 
and the offspring took her name. This condition of things prevailed 
for some time in ancient Egypt. 



134 WHAT CAPITALISM IS 

over polygamous tribes, is an unanswerable argument 
in favor of marriage, of which no well-informed Socialist 
fails to take account — Mr. Roosevelt to the contrary 
notwithstanding. The Socialist party is to be judged by 
its platform and not by extracts of isolated writers who 
have no more right to bind the whole Socialist party on 
the subject of marriage, than an isolated Republican 
or Democrat would have to bind the Republican or 
Democratic parties respectively. Of course, property of 
a man in his wife long ago ceased to exist in civilized 
countries; it has played its part in its time, but disap- 
peared before a more humane, intelligent, and just under- 
standing of the relations of man to his wife. In the 
same way, the right of property of one man in the labor 
of another will also yield to a more intelligent and wise 
understanding of the right of property. 

The institution of property performs one other function 
in society of inestimable importance. Early civiliza- 
tions such as those of Greece and Rome, dominated by 
families who claimed descent from the gods, created an 
aristocracy of birth which, because it was exclusive, 
tended inevitably to become tyrannical. As, however, 
rights of property became more and more recognized, 
the aristocracy found itself confronted by a population 
that had accumulated wealth indispensable to the main- 
tenance of the state. Men too who had accumulated 
this wealth had done so by the use of their brains, in- 
dustry, forethought, and self-restraint. They constituted 
a group with which the aristocracy of birth had first to 
parley and to which it had eventually to succumb. It 
is true that this group of the aristocracy of wealth, which 
succeeded the aristocracy of birth, in one sense only 
replaced one set of rulers by another. But the transfer 
of power to the aristocracy of wealth was almost always 



THE RESULTS OF PROPERTY 135 

effected through the support of the people, and was 
almost always attended by some concession of political 
control to the people. So that on the whole, the tendency 
has been for every transfer of political power from the 
aristocracy of birth to the aristocracy of wealth to in- 
clude some element of popular representation until 
slowly through the gradual substitution of the bourgeoisie 
for the king, noble, and priest, the people has secured the 
priceless boon of the franchise which it has not yet learned 
to use. 1 

§ 1. The Gold 

Xow that we have given full credit to the role which 
property has played in the world, let us consider some of 
its results. In the first place, let us eliminate a prevail- 
ing error. We frequently read in Socialist books that the 
competitive system is the necessary result of the institu- 
tion of private property. This is not altogether true: 
Obviously, the institution of property has connected 
with it the notion that as long as men are protected in the 
product of their labor, every man is bound to labor 
enough to support himself; and if he does not so labor, 
he must suffer the natural consequences. Under this 
system, every man is at liberty to labor in whatever 
occupation he chooses, to produce as much as he can, 
and to get the best price he can for what he produces. 
Xo attempt will be made here to describe the abominable 

^sequences of this system prior to the Middle Ages. 
The history of the industrial struggle prior to the Middle 
Ages is still obscure and complicated. But the Crusades 
in the eleventh century withdrew from Europe the most 

1 This is elaborated in "Government or Human Evolution/' Vol. 

n, p. 96. 



136 WHAT CAPITALISM IS 



turbulent of its oppressing nobility and the most servile 
of its religious subjects. The result was to give to the 
less servile craftsmen an opportunity to organize them- 
selves against the noble and the priest in defence of their 
common craft. So we find all over Europe an immense 
development of guilds or corporations organized by the 
respective crafts or industries, primarily for self-defence, 
and secondarily, for the organization and regulation of 
labor therein. The story of these guilds has been too 
often written to make it necessary to repeat it here. 1 
I shall content myself therefore with pointing out that these 
guilds did for a season exercise an extraordinarily beneficial 
effect, not only on industry, but on government. The 
guilds were composed not only of employers, but also 
employees, and thus stand out in marked contrast to 
trade unions. In many respects, however, they were 
similar to trade unions. Thus they had benefit funds 
in case of sickness and death; and they were animated 
by a sense of solidarity similar to that which animates 
the trade unions. But the fact that the guild included 
employer as well as employee gave it also different and 
important functions. Every guild at the outset was 
inspired by a sense of self-respect as well as of solidarity. 
It was a matter of pride with them that the guild should 
furnish no goods not up to standard. The guild there- 
fore early established elaborate rules fixing standards 
and prices so that no man could charge a high price for a 
low standard of goods, nor could he compete with others 
in the same guild by offering a high standard of goods 
for a lower price than that determined by the guild. The 
guild protected the public from poor workmanship and the 
worker from competition. Moreover, competition was 
still further eliminated by the fact that no man could 

1 " Government or Human Evolution," Vol. II, p. 102. 



THE RESULTS OF PROPERTY 137 

engage in any craft or trade unless he belonged to the 
guild organized to defend and protect the trade; and as 
the guild became a part of the municipal government and 
indeed at certain periods controlled the municipal gov- 
ernment altogether, the guild was in a position to enforce 
this rule. 

There are many features in the guild system which 
would be usefully borrowed in a cooperative common- 
wealth. But the guild system broke down because every 
guild was concerned with its own interests irrespective 
of the interests of the whole community. Every guild 
therefore became a class corporation which sought to 
use the guild for purely selfish purposes. Entrance to 
the guild was confined to members of the families of 
those controlling the guild; and no provision was made 
for the thousands and hundreds of thousands who, be- 
cause they could not get admission to a guild and could 
find no work to do upon the land, were left to wander as 
vagrants through the streets and highways with no 
alternative save to steal or starve. In other words, the 
vagrant of the Middle Ages included the unemployed of 
to-day. Again, those who controlled the guild sought 
by limiting the number of its members to create a privileged 
society from which they could derive wealth without 
labor. Thus the whole business of killing and selling 
meat was at one time in Paris confined to twenty per- 
sons. These persons did not themselves engage in the 
business, but they sublet their respective monopolies 
to others, and thus constituted an idle aristocracy. 

The abuses which attended the guild system became 
so intolerable that in 1776, the very year when we in 
America were setting forth our political rights in the 
Declaration of Independence, King Louis XVI pro- 
claimed the economic rights of the workingmen in France 



138 WHAT CAPITALISM IS 

in one of the most extraordinary documents to be found 
in history. 1 If we could get this Republic of America 
to promulgate and to put into operation the principles 
set forth in this decree of an absolute king in 1776, we 
should secure all that the Socialist party of to-day de- 
mands; that is to say, the right secured by law to men, 
not only to work, but to enjoy the full product of 
their work. But civilization had not yet advanced far 
enough to understand the full import of this decree, and 
the guilds were too powerful at that time to permit of 
its execution. The Parlement de Paris flatly refused to 
register the edict. The king tried to execute the edict 
notwithstanding the refusal by the Paris Parlement; 
but the attempt created such disorder that in the same 
year the edict was abrogated. No attempt was made to 
execute this decree in the provinces whatever. Mean- 
while, however, two forces were at work that were destined 
to break up the tyranny of the guilds. One was the 
discovery of steam, which put an end to home industry 
and subjected workmen to the conditions imposed by the 
owner of the factory. The other was the growing up- 
heaval of the Tiers Etat, or popular branch of the govern- 
ment, which resulted in the French Revolution. 

The French Revolution has been a good deal too much 
confined by historians to the political upheaval of the 
people against the noble, the priest, and the king. Atten- 
tion has not been sufficiently attracted to the fact that it 
was at the same time a revolt against the economic tyranny 
of the corporation or the guild. The cry of liberty which 
ushered in the French Revolution was not confined to 
political liberty. It was extended to liberty of industry 
— liberty of trade — liberty of contract. In other words, 
what Rousseau did for political emancipation with his 

1 Translation, see Appendix, p. 422. 



THE RESULTS OF PROPERTY 139 

theory of social contract, de Quesnay did for economic 
emancipation with his doctrine of laissez faire, a doctrine 
which prepared the way for the political economy of 
Adam Smith and that of the Manchester School. 

The essential principle preached by de Quesnay and 
later by Adam Smith and Herbert Spencer, is that every 
man must in his efforts to support himself and accumulate 
wealth be "let alone! " 

It is of the utmost interest that this policy of laissez 
faire was inaugurated under the cry of liberty and is 
still supported on the ground of liberty. When we see 
the evil consequences of this kind of liberty we shall feel 
like crying with Madame Roland when she saw the 
guillotine doing its grim work on the Place de la Gre ve : 

"O liberty, what crimes are committed in thy name!" 

And here we shall appreciate the importance of having 
clear ideas as to what liberty is and of therefore being 
able to distinguish false notions of liberty from true. 

If leaving to every man absolute liberty as to what he 
is to produce, how he is to produce, and what he shall 
charge for it, would result in the most orderly and there- 
fore economical system of production and distribution; 
if it were to secure to every man work in the first place, 
and the product of his work in the second place, then it 
would be justified. But if it produces none of these 
things, but on the contrary, produces the greatest con- 
ceivable disorder and therefore greatest possible waste; 
if it not only fails to assure to men the product of their 
work, but even fails to give as many as one-third of those 
engaged in industry any chance of working at all, as at 
present, so that hundreds of thousands and even millions 
are at this time of writing not only without work, but 
actually on the verge of starvation — and if this system 



140 , WHAT CAPITALISM IS 

not only causes injustice and misery to all these millions, 
but does not even make the few who profit by it happy — 
if the tendency is also to make them immoral — if instead 
of promoting liberty, it — on the contrary — makes slaves 
of all, not only of employees but also of employers, so 
that neither is free to be generous or just to the other and 
both are skirting ruin — the employer in the shape of 
bankruptcy, and the employee in the shape of unemploy- 
ment; and last but not least, if this system is stupid — 
of all the stupid systems conceivable the most stupid — 
and I have been able to call as witnesses to this assertion 
the admittedly ablest business men now living in America, 
what shall we shrewd, practical Americans have to say 
in defence of it? 

But we have still two important results of the com- 
petitive system to consider — the trade union and the 
trust; not only for the evils that attend them, but for 
the inevitable conflict to which they give rise. The issue 
of this conflict is the real political issue of the day. All 
the political parties save only one are seeking to ignore 
it; but they cannot. It will end by either reforming 
or destroying them. To this question too much atten- 
tion cannot be given, for upon it depends the survival 
of civilization itself. 

§ 2. Trade Unions 

The attempt has already been made to show that the 
organization of trade unions and trusts w T as not due to acci- 
dent, but was the necessary and inevitable consequence 
of the freedom of contract, freedom of industry, and 
freedom of trade inaugurated by the French Revolution. 
These three so-called freedoms are a sentimental way of 
describing the competitive system, and as a matter of 



THE RESULTS OF PROPERTY 141 

fact, not only make real freedom impossible, but pave the 
way for despotism — the despotism of the market in the 
first place and the despotism of the trade union and trust, 
to which the despotism of the market inevitably leads. 

The illusion contained in the words "freedom of con- 
tract" is well demonstrated in the history of the trade 
union, for if the employee is to be free to make such 
contracts as he chooses, he is not only free as regards 
the contracts he chooses to make with his employer, 
but also as regards the contracts he chooses to make with 
his fellow employee. And amongst the contracts that 
he is free to make with his fellow employee is the con- 
tract not to work for his employer except under certain 
agreed conditions. In other words, the trade union is 
simply an expression of freedom of contract between 
employee and employee. But to what does this freedom 
of contract between employee and employee lead? It 
leads to a suppression of the freedom of contract, for it 
is an agreement not to work with the employee except 
under conditions imposed by the trade union. Freedom 
of contract, therefore, so far as the employee is con- 
cerned, under the competitive system compels employees 
to abandon freedom of contract. 

This may seem paradoxical until we understand the 
real significance of it. Man stands between two alterna- 
tives — the unlimited freedom and insecurity of savagery 
and the limited freedom and security of civilization. 
This has been developed in the chapter on Property 
and Liberty and receives interesting confirmation in 
the history of trade unions, which has been too often 
and too well told to make it necessary to repeat it 
here. Suffice it to point out that all historians of the 
trade union movement record the fact that at the very 
time when employers were shouting for freedom of con- 



142 WHAT CAPITALISM IS 

tract they passed laws denying freedom of contract 
to workingmen. 1 But the very effort of the employers 
to prevent employees from combining with one another 
reduced wages to so low a level and brought about so 
wicked an exploitation of women and children and such 
unsanitary conditions of the whole working population, 
that a parliament of employers was as a matter of national 
defence compelled to restore to workingmen the right to 
agree to abandon freedom of contract. 

It may appear to the unsophisticated that for a work- 
ingman to endeavor to escape from the tyranny of the em- 
ployer by subjecting himself to the tyranny of the trade 
union is but a jump from the frying-pan into the fire. 
But such a conclusion would display woeful ignorance as 
to the whole trend of human development; that is to say, 
from involuntary subjection to a power over which we 
have no control, to voluntary subjection to a power over 
which we have control. This is the history of the develop- 
ment of all popular government. Reactionaries are dis- 
posed to dwell on what they call the tyranny of the majority 
and compare it unfavorably with the beneficent despotism 
of a Henri IV. They, however, ignore the very mate- 
rial fact that an absolute monarchy represents an in- 
voluntary servitude over which the subject has no con- 
trol; whereas the tyranny of a majority represents a 
voluntary subjection to authority over which we have 
control. It may be and undoubtedly is true that con- 
trol over government even under popular forms of govern- 
ment is small and ineffectual; but I hope to make it clear 
in the chapter on the Political Aspect of Socialism 2 that 
the ineffectualness of our control over government is due 

1 Article 414 of the French Penal Code and Law of 1799 of the 
British Parliament. 

2 Book III, Chapter III. 



THE RESULTS OF PROPERTY 143 

to the competitive system and that under a cooperative 
system our control over government would be effectual; 
and that it is only under a cooperative commonwealth 
that the ideal democracy can be realized. 

The development of trade unionism throws also a 
great light on the fact of human solidarity. Socialists 
are often accused of being theoretical and the bourgeois 
is disposed to regard human solidarity as a theory. But 
in the growth of trade unionism it will be observed that 
solidarity presents itself as a rock upon which the com- 
petitive system must ultimately be wrecked. The 
capitalist class expressed its wish in the law of 1799, which 
was a law of oppression; but the inconvenient fact that 
women cannot be worked like beasts of burden under 
ground without arousing the sympathies even of the 
capitalist class; that little children cannot be made to 
suffer and to starve without reaching the hearts of the 
whole nation, and that cholera bred in unsanitary dwell- 
ings will find its way to the doors of the rich, forced this 
same capitalist class to abrogate the law of 1799; to 
abandon the policy of oppression in consideration of its 
own best interests. 

So combinations amongst employees have grown in 
strength in spite of all the power of capital — political 
and industrial. This progress was inevitable. Given 
freedom of contract, or in other words, the competitive 
system; given some intelligence on the part of some of 
the proletariat; and some compassion in the hearts of 
some employers, and trade unions had to develop and 
grow in strength. 

But now that they have developed and grown in 
strength — now that they can be said to have reached what 
seems to be maturity, let us consider how much good they 
have done. Let us discuss the unsolved and what I 



liAT CAPITALISM IS 
believe to be the insoluble problems that result from trade 



Before entering into this • chat if 

ia not discuss here the merits of trade unionism i: e 
not bemuse I am not aware of them : but rather becans 
in thfe work on Sialism, which I des make as 

concise as possible, it is not the merits of trade unionism 
which it is important to emphasise, but their demerits 
Although the intelligence* order, and self-resstraint dis- 
played in the trade union movement must be to the eternal 
credit of the workinginan, nevertheless all his effe - 
however intelligent, however orderly, however saerifie- 
lag, have foiled to solve the problem of couKct be- 
tween labor and capital. It is ob r for the 
woildngman to seek salvaticai wheane i: andthan 
clinging o trade unionism to abandon 
salvation altogether. Trade unionism. I cannot emphasise 
it too much — was and is still a necessary step in the 
development and education of the workingman: but it 

step, and nothing demonstrates the inadequ. 
of trade unionism better than the conditions of unem- 
ployment that have existed during the last two years 
not only in the United States aeriea* but almost 

throughout the entire civfflbed world must m 

supposed, however, that because > ape belie i 

to have created new evils almost as intolerable as th. i 
»veie organised to supplies?, that trade unions are 
be looked upon with disfavor. On the contrary,, I 
whole argument of this book proceeds upon the self- 
evident fact that trade unions have performed a necessary 
function and are bound to perform a necessary function in 
the community until the trade union realizes its ideal, but 
ihat a realisation of this ideal is impossible under the com- 
petitive system. In other wonis ? the attempt will be 



Ji PROI 14i 

demonstrate th ie unions ha 

under the eomp e «ystem, failed and must continue 
to fail iplish the work they set out to do, but u 

der the codp< pvtem t] d will attain 

and will perform exactly what they 

*.o do. J: r much, tl "6, our ar:; I- 

rnent may de&M failure of trade unions un' t 

;itions, it only leads to the triumph of trade 

unions under eodg) r e conditions. What die trade 

j under . and will 

ode! a cooperative commonwealth. 
The a r B not to abandon 

le unions, but, o .trary, to appeal to the un- 

orp ; oin the trade union in or. 

to streng' xrially; and on the other hand to 

appea ■/:-.. organized or unorganized, to 

mbine politically for the purpose of securing by f ranch. 
can accomplish b 
ie moral t: be drawn from the following pages 

trade union.-; have >.n end of their 

mine.-; their task in the past has 

bee heck exploitation, their role in the future will 

o put ai to it h. 



§ 3. The D D Insoluble Problem 

of Trade Uxi 

John Mitchell in h: ' has very 

perly stated that "the ideal of Trade Unionism is to 
comr . one organization all the men emplo; 

capable of tployed, trade, and to de- 

mand and secure for each and all of them a definite 
minimu. odard of wages, hours and condition 



146 WHAT CAPITALISM IS 

work;" 1 and the principle of Trade Unionism is also well 
described as "the absolute and complete prohibition of 
contracts between employers and individual men." 2 
In other words, the object of the Trade Union is to put 
an end to competition between employees in order to 
substitute what is called " collective bargaining," which, 
if complete, would put the employer at the mercy of the 
employee, for individual bargaining, which on the con- 
trary puts the employee at the mercy of the employer. 

The above is stated in other words in the Report of the 
Industrial Commission : 3 

"The union is conceived as a means of bettering the 
condition of its members by united action. If this action 
is to be thoroughly effective, it must be taken by or on 
behalf of all the members of the craft. It is by the establish- 
ment of an absolute monopoly of labor power and to 
ameliorate the conditions under which it is sold and used." 

Now the inherent and necessary defect of trade union- 
ism under the competitive system is to be found in the 
words I have italicized in the above extract. If the 
trade union could be a "real monopoly of labor," it could 
dictate terms to the employer; but it must not be for- 
gotten that, with the employer, it would remain subject 
to the conditions created by the market. The very fact, 
however, that all relations between labor and capital are 
determined by the conditions of the market makes it 
impossible and will always make it impossible for the 
trade union to attain its ideal; that is to say, to con- 
stitute an absolute monopoly of labor power, to bind in 
one organization all the men employed, to secure the 
absolute and complete prohibition of contracts between 

1 " Organized Labor." By John Mitchell, p. 4. 

2 Ibid., p. 3. 

3 Report of the Industrial Commission, 1901, Vol. XVII, page 1. 



THE RESULTS OF PROPERTY 147 

employers and individual men, to demand and secure 
for each and all of them a definite minimum standard of 
labor, wages, and conditions of work. This is the crux 
of the whole question. 

It has taken over a century of organization on the part 
of the employer and employee, of conflict between the 
two, of bankruptcy for the employer and of misery for 
the employee, to demonstrate that the ideal of trade 
unionism has not been and can never, so long as the 
competitive system persists, be attained. The trade 
unionist will answer that even though it be impossible to 
attain the ideal, trade unions have accomplished much 
and can accomplish more for the wage-earning class. 
To this it may be fairly answered that whatever trade 
unions have in fact accomplished has been accomplished 
only at a ruinous price — that the price they must continue 
to pay for this accomplishment will continue to be ruinous 
and insufferable until either by the revolt of the dis- 
contented as predicted by Karl Marx, or by the awaken- 
ing conscience of the whole community, as has already 
to a limited degree taken place, the betterment aimed at 
by the trade unionist will be attained and maintained 
without the payment of the awful toll now exacted by the 
competitive system. 

It is probable that both employers and employees, 
during a century's struggle, have failed to take proper 
account of the extent to which both were hampered by 
the exigencies of the market. The blindness of both 
to this fact was perhaps due to the expansion of trade 
both in England and America during most of the century; 
this expansion being due to the development of the 
country in the United States and, in England, to the 
conquests of new markets and colonies. So long as 
expansion continued, trade unionists could insist upon 



148 WHAT CAPITALISM IS 

increasing wages out of increasing prices, and the 
success which attended trade unions in raising wages 
during a large part of the century, brought about a false 
idea that there was no limit to the extent to which 
trade unions could by organization increase their share 
in the profits of industry. Unfortunately, the era of 
expansion could not last forever, and it was not until 
the lockout of the engineers in 1898-1899 that the 
British trade unionists began to discover how narrow 
were the limits within which they could improve con- 
ditions. 

Until 1897 the employees had on an average the best 
of it. In 1893 no less than 63 per cent of strikes were 
decided in favor of the employees. In 1896 again the 
proportion of working people involved in disputes settled 
in their favor was greater than in any of the previous 
years since 1892 with the exception of 1893; and it may 
be interesting to note that during this year there was a 
lower percentage of unemployed than during any year 
since 1890. 1 It is not surprising, therefore, that trade 
unionists were convinced that there was no limit to the 
extent to which they might increase their share in the 
profits of industry. In 1897, however, the condition 
of the steel industry in England became such that the 
employers could no longer comply with the exactions 
of the trade unionists. In 1895 American manufacturers 
for the first time attempted to export their steel to other 
lands, 2 and their exports grew to $121,913,548 in 1900 
and to $183,982,182 in 1908.3 

In the presence of American as well as German com- 

1 Bulletin of the Dept. of Labor, 1898, pp. 714-717. 

2 Andrew Carnegie's article on the Steel Industry in the En- 
cyclopedia Americana, Vol. XIV. 

3 Statistical Abstract, 1908, p. 445. 



THE RESULTS OF PROPERTY 149 

petition, the pressure of the market was such that the 
employers felt they must either break the power of the 
union or go out of business. They therefore locked out 
the engineers in July, 1897, and the lockout lasted until 
January, 1898, when the union was obliged to abandon 
all its contentions. This lockout is the turning point 
in the history of trade unionism in England. Up to 
that time, the idea that workingmen could be induced 
to abandon the parties to which they belong in order to 
organize a party of their own was never seriously taken 
into consideration at their conventions, and resolutions 
in favor of Socialism were overwhelmingly voted down. 
But as soon as the power of the engineers — the strongest 
union in England — was broken in 1897 we find trade 
union conventions entertaining the idea of political 
organization and resolutions in favor of Socialism re- 
ceiving careful consideration. 

The history of trade unionism in America has not as 
yet resulted in any such definite climax as this; but 
what foreign competition has compelled English employers 
to do a combination of employers in the Steel Trust has 
done for the steel workers in America. In other words, 
the trade union has to face one of two alternatives : either 
foreign competition is bound ultimately to compel the 
employer to destroy the union; or in the absence of 
foreign competition owing to a high protective tariff, a 
combination of employers will do for their own benefit 
what competition compelled British employers to do as 
a condition of survival. 

If we turn from the history to the nature of trade 
unions it will be seen that what has happened must 
have happened. As has been stated, all agree that the 
ideal of trade unionism is to unite all the workers in one 
trade so as to substitute collective bargaining for in- 



150 WHAT CAPITALISM IS 

dividual bargaining. Unfortunately by the very nature 
of things such a combination is impossible. It is im- 
possible to read any work on trade unions, whether it 
emanates from the government, or from employers, 
or from employees, without being struck by the fact that 
trade unions seek to be comprehensive, to include all 
the members in the trade on the one hand, while on the 
other hand there is a perpetual pressure upon them to be 
exclusive. For example, we find locals charging heavy 
initiation fees of a character to keep out members, for 
instance the longshoremen, the garment workers, glass 
workers; and it may be "stated as a general rule that 
when a union does succeed in establishing a monopoly 
against employers it is exceedingly likely to go on, if 
it feels strong enough, to establish a monopoly against 
the employees." *■ 

It is perfectly true that this tendency is frowned upon 
by the trade unionists at large; but the reason for this 
is that every union which tries to be exclusive cultivates 
a crop of non-unionists who constitute a menace to the 
union. 

A better illustration of the quandary in which unionists 
find themselves between the importance of being com- 
prehensive in the one hand and the importance of being 
exclusive on the other, is found in their attitude towards 
boy labor. 

Modern conditions have made apprenticeship prac- 
tically obsolete, and yet many national organizations 
endeavor to maintain the practice with a view to prevent- 
ing too great a supply of skilled workers in the trade. 
The limit generally fixed by national organizations is 
1 to 10, though some, such as pressmen, trunk and bag 
workers, flint glass workers, allow 1 to 4. Lithographers 

1 Report of the Industrial Commission, 1901, Vol. XVII, p. 1. 



THE RESULTS OF PROPERTY 151 

allow 1 to 5. 1 "It is obvious/' says the Report of the 
Industrial Commission, "that the chief motive which 
influences the unions in the shaping of their apprentice- 
ship rules is the desire to maintain their wages, by 
diminishing competition within the trades. " 2 

It is true that many unions in controlling apprentice- 
ship are animated by a much higher purpose; that is 
to say, to provide that when a boy undertakes to learn 
a trade he shall have a chance to learn it. 

John Mitchell in his book 3 claims that the restriction 
of admission of apprentices in the United States is neg- 
ligibly small, and yet deplores the fact that "the great 
mass of j^ouths to-day receive little or no training in their 
particular trade as a result of the breakdown of the 
apprenticeship system." In his opinion the solution 
to the problem is not to be found in apprenticeship, but 
in industrial schools; yet he deplores the hostility of 
graduates of trade schools to trade unions, without 
apparently recognizing that this hostility is due to the 
hostility first evinced by unions to trade schools. But 
let us turn from conflicting opinions and look the facts 
in the face. 

When a unionist approaches the age of forty years, he 
is confronted by the fact that he cannot rival in speed and 
efficiency the work of a young graduate of an industrial 
school. He looks forward to the time when his place 
will be taken by the graduate of the industrial school. 
Pie is very naturally therefore hostile to the industrial 
school and the graduate of the industrial school is for 
the same reason hostile to him. And here we come to 
the real difficulty : When a trade union fails to include 

1 Report of the Industrial Commission, 1901, Vol. XVII, p. Hi. 

2 Ibid., p. liii, 1901. 

3 "Organized Labor," Chapter XXX. 



152 WHAT CAPITALISM IS 

all the members in the trade, it does not succeed in 
eliminating competition between workingmen. On the 
contrary, it begins by creating two hostile classes of 
workingmen: Those within the union and those without — 
classes which bitterly hate one another because they are 
both fighting for the same job. But they do more than 
this: They create competition within the trade union 
because by insisting upon high wages and short hours 
they are making it impossible for the employer to utilize 
the service of any but the most efficient. John Mitchell 
himself points this out. In resisting the charge that 
trade unions tend to level down, he says: "If there is a 
levelling at all in the trade union world, it is a levelling 
up and not a levelling down. The only levelling which 
the trade union does is the elimination of men who are below 
a certain fixed standard of efficiency." l He further ex- 
presses it in another passage: 2 "Trade unionism tends to 
improve workmen not only directly, through an increase 
in wages and a reduction in hours, but it attains the same 
end in an indirect manner. The general policy of trade 
unionism, as has been explained before, is the establish- 
ment of a minimum wage, safeguarding, as a rule, the 
right of the employer to discharge for proved inefficiency. 
The result of this is the gradual creation of a dead line of a 
standard of efficiency, to which all who work must attain. 
Where there is a minimum wage of four dollars a day, the 
workman can no longer choose to do only three dollars' 
worth of work and be paid accordingly, but he must earn 
four dollars, or else cease from work } at least in that par- 
ticular trade, locality, or establishment. The conscious- 
ness that he may be employed for a varying wage permits 
many a man to give way to his natural idleness and care- 
lessness, whereas the maintenance of a rigid standard 

1 "Organized Labor," p. 240. 2 Ibid., p. 163. 



THE RESULTS OF PROPERTY 153 

causes a rapid and steady improvement. The minimum 
wage acts upon the workman as the school examination 
upon the child. If a child falls, by however small a margin, 
below the standard set by the school, he fails of promo- 
tion, and the stimulus which is strong in the case of a 
school child is infinitely more intense in that of a worker 
with a family dependent upon him. The principle of 
the survival of the fittest through union regulations works 
out slowly and unevenly; nevertheless its general effect 
is towards a steady and continuous progress of working- 
men to a permanently higher standard of efficiency. " 1 

There is one point upon which the author is silent — 
yet it is the point which enormously interests the working- 
man at large : this is that while trade unionism guarantees 
high wages and short hours to the efficient, it throws out 
of the trade altogether those workingmen who do not 
attain a high standard of efficiency or who, having at- 
tained it, fall back from it owing to overwork, sickness, 
or old age. 

There is, therefore, a perpetual struggle going on in the 
trade unions, not only between members and non-members, 
but even amongst the members of the union itself, in 
view of the fact that diminished efficiency must eventually 
lead to the weeding out of the inefficient. In periods of 
industrial depression such as we have just passed through 
it is obvious that the most inefficient are the first to be 
dismissed, and being the most inefficient, they are the 
ones least able to find employment in other industries. 

Under the title of Unemployment, the extent of this 
evil has been pointed out; it must not be lost sight of; 
it reaches a population of a million at the best of times 
and of five millions at such times as these. 

But the problem raised by the importance of com- 

1 "Organized Labor," p. 163. 



154 WHAT CAPITALISM IS 

prehensiveness to prevent " scabbing" on the one hand 
and of exclusiveness to maintain wages on the other, is 
not confined to such details as initiation fees and appren- 
ticeship. It covers the whole question of the employment 
of boys, women, old men, and half-supported persons, 
and includes the "sweating" system. 

The higher the wages exacted by trade unions the more 
employers are compelled to have recourse to cheap labor 
of women and children, and this labor is all the cheaper 
because the unionist himself contributes to the supply; 
for the unionist supports his wife and children, and the 
very fact of the support he gives them permits them to 
accept a lower rate of wages than if they were not sup- 
ported. To understand the operation of this principle 
it must be borne in mind that rates of wages are deter- 
mined, not by the wishes of the employee or even by the 
greed of the employer; they are determined by the 
market price. Unionists are not the only persons who 
object to the labor of women and boys. There is indeed 
no divergency of opinion as to the unwisdom of working 
boys before their education is complete or their bodies 
matured; or the unwisdom of employing women, destined 
by Nature to perform other more important functions. 
No better witness to the control exercised by the market 
on this important subject can be found than a mem- 
ber of the English Ministry, the Right Honorable H. O. 
Amold-Forster, who says: 

"The great cotton industry of Lancashire, the wool and 
worsted industry of Yorkshire, and many other industries 
in a less degree are at the present time dependent upon 
child labor. It is interesting to observe that as lately 
as the autumn of 1907 a deputation waited upon the 
responsible minister to urge upon him the desirability 
of raising the age of half-timers from twelve to thirteen. 



THE RESULTS OF PROPERTY 155 

The desirability of the change was not denied, but it was 
not considered possible to give effect to it. 

" Those who have any acquaintance with the cotton 
trade are well aware that that great industry, employ- 
ing as it does no less than half a million persons, is con- 
ducted upon the most minute margins of profit and loss. 
The rate book of the cotton trade, in which wages of every 
kind of work are calculated out to the tenth of a penny, is a 
miracle of painstaking and intelligent computation. These 
fine calculations are absolutely necessary. Both employers 
and employed know perfectly well that the trade is, so 
to speak, balanced on a knife edge, and that any sudden 
increase of cost, whatever may be its cause, is likely to 
upset the balance, and turn the hardly won profit out 
of which operators as well as employers obtain their 
living, into a loss. The fierce competition of the world, 
especially of those countries in which child labor and long 
hours are prevalent, has to be met, and the persons 
principally concerned are only too well aware of the 
fact." 1 

Nothing then is better established than that every 
employer is forced by the pressure of competition to keep 
wages down, and that any employer who either under 
the compulsion of a trade union or out of generosity of 
heart attempts to raise wages one cent above the price 
permitted by the market, must expiate his mistake in 
the bankruptcy court. 

There is only one way in which this competition can 
be met — the way imagined by Karl Marx: a compre- 
hensive organization of trade unions, not only within one 
nation, but amongst all nations; in other words, the 
famous — and at one time loudly proclaimed as the in- 
famous — International. The fact that the international 

1 "English Socialism of To-day," pp. 99-100. 



156 WHAT CAPITALISM IS 



plan of organization imagined by Karl Marx failed, is 
little argument against it. But the fact that trade unions 
do not succeed in securing all the members of a trade in 
any nation — that indeed in the United States organized 
labor includes at most 2,000,000 members, whereas the 
working population is over 20,000,000, ought to be a 
convincing argument that a comprehensive organization 
of workers all over the world is still less possible. 

One word must be said in this connection about the 
sweating system and its relation to trade unions. It is 
a current statement that sweating is confined in America 
to a few industries, such as tobacco and garment making. 
This, however, is a great mistake. Sweating may be 
defined as the reduction of wages to starvation or even 
below starvation level. It is true that sweating in this 
country is in large part due to an ignorant, unorganized, 
and poverty-stricken class of immigrants. But sweating 
is also to be found in a much higher order of employees. 
I refer to the sweating of certain factories and department 
stores where the rate of wages is determined, not by the 
cost of living, but by the price which half -supported 
women are willing to take for their week's work. 

In many factories and in practically all the department 
stores the wages are below the sum necessary for a work- 
ing woman to live; and they are made so at least in part 
by the fact that the daughters of well-to-do workingmen, 
being supported at home, are able and willing to give 
their time for a sum less than sufficient to support life. 
In some cases this work is rendered in a laudable desire 
to contribute to the common expense of the home. In 
many cases it must be attributed to vanity and the 
attractiveness of this kind of work. 

We find, therefore, the workingman put in this singular 
position: Through his trade union he secures a high rate 






THE RESULTS OF PROPERTY 157 

of wages; with this high rate of wages he seeks to establish 
a decent home; the desire of a decent home permeates 
the entire family; the daughters want to contribute 
thereto and, because they are partially supported them- 
selves by the high wages received by the father, they ac- 
cept a rate of wages so low that their less fortunate sisters 
are doomed to starve. 

So on every side the trade unionist is hoist by his 
own petard. The high wage he is in a position to exact 
is perpetually menaced by the competition of the women 
and children of his own family whom his own high wages 
put in a position to compete with him. These high wages 
throw out of employment all save those of the highest 
efficiency, and by permitting the half -supported members 
of his family to work for low wages, reduce others who 
are not half supported below the level of starvation. 

I shall not insist on other problems which still divide 
the members of trade unions, such as what is called " right 
of trade," or "the conflict between industrial and craft 
organization," both of which occasion loss of employment 
and division in the ranks of labor, because these are not 
insoluble. It is true that they have not yet been solved, 
but there is nothing in their very nature that makes a 
solution impossible. I do, however, insist upon the 
problems above referred to, because they are not only 
unsolved, but by their very nature can never be solved. 
No trade union can ever include all the men of the trade, 
because all cannot earn the high standard of wages set 
by the union; because the trade never can give employ- 
ment to all the men in the trade — at the best of times 
there are over 3 per cent unemployed; because by in- 
sisting on a high rate for unionists, they compel the em- 
ployer to have recourse to the cheaper labor of women and 
boys; because the very sense of family responsibility 



158 WHAT CAPITALISM IS 

which makes a unionist support his wife and children 
is exploited by the employer to secure the services of 
these last at half wages; because the existence of a half- 
supported population creates and maintains sweated 
trades; because the employers, were they Angels of 
Mercy, cannot, thanks to the pressure of the market, 
raise wages or dispense with the cheap labor of women 
and boys without either incurring bankruptcy or shutting 
down; because either contingency would deprive the 
unionist of work and therefore of wages; because both 
employer and employee are perpetualty being chased 
round a vicious circle by the devil of competition which, 
by keeping down prices and wages, keeps both in danger 
of ruin and unemployment. 

The conclusion to which we are driven seems to be 
that the competitive system has the same effect upon 
trade unions as upon the rest of the industrial field — it 
sacrifices the many to the few. During these last two 
years wages have not been appreciably reduced. The 
most efficient have continued to receive the same wages 
as before. But the price paid for this advantage has been 
the reduction of between five and twenty millions of 
people to the verge of starvation, a large part of whom 
must by the very necessity of things be driven to vagrancy 
and through vagrancy to crime. 1 

What Socialism proposes is to maintain the principle 
of competition to the extent necessary to assure most 
comfort to the most efficient without exposing the rest 
to so awful an alternative as unemployment. And I 
think it will be seen that the education of the working- 
man through the organization, the order, the democracy 
of trade unions will play no small part in making Socialism 

1 Letter of Police Commissioner Bingham, New York city, 
N. Y. Times, Jan. 5, 1908. See Appendix, p. 423. 



THE RESULTS OF PROPERTY 159 

possible, and that it is probably through the organiza- 
tion of trade unions that a true democracy will eventually 
be attained. 

§ 4. Trusts 

Two pictures of trusts have already been borrowed in 
this book, 1 one by Mr. Rockefeller, showing the economies 
they make, and the other by Mr. Havemeyer, showing the 
dangers that attend them. Trade unions start out to 
include all the men in the industry; this is their ideal; and 
it has been shown how far short of it they fall. It is 
generally supposed that trusts likewise seek to include 
all employers in the industry, but this is a great mistake. 
Not only does the law forbid this, but it would be a mis- 
taken policy. A trust that included all the industry 
would invite newcomers for blackmailing purposes if 
for no other. The last and best policy of the promoter 
is to include only the most prosperous and to leave around 
the trust a fringe of independents too weak to affect 
prices but just strong enough to live as a warning to 
others. A good collection of independent factories on 
the verge of bankruptcy is the finest bulwark a trust can 
have, for they discourage the starting of any more. 

How the trusts make prices and keep independents in 
their wake is well illustrated by the following extract: 2 
"The custom has regularly been for some years for 
the Standard Oil Company to announce from day to 
day the price which it would pay for crude petroleum 
and the price at which it would sell refined petroleum. 
This price is generally accepted as the market price, and 
competitors follow." 

1 Book II, Chapter III. 

2 Report of the Industrial Commission, 1901, Vol. I, p. 18. 



160 WHAT CAPITALISM IS 

" Likewise, the American Sugar Refining Company 
first posts the prices for the day, and is then followed 
by its competitors, who post theirs. Generally they take 
the prices fixed by the American Sugar Refining Company; 
but at times, if they have a little surplus stock on hand, 
or if it is difficult for them to secure a customer, they will 
cut the price perhaps one-sixteenth of a cent per pound. 
One or two of the chief competitors seem to be forced to 
put their prices quite frequently at one-sixteenth of a 
cent below that of the American Sugar Refining Company. 
In spite of its control over the output it is said by Mr. 
Post that the American Sugar Refining Company has 
not, in his judgment, unduly restricted the output. It 
is probable, he thinks, that had that company not been 
formed the competitive system would have ruined many 
established refineries, so that as many would have been 
closed as is now the case, and the output would have been 
fully as small, probably even less. Practically all of the 
witnesses, both members of the combination and their 
opponents, concede that while there is a certain arbitrari- 
ness in fixing the prices it has been exercised in most cases 
only within comparatively narrow limits, and then, 
mainly to meet competition or stifle it." 

Trusts, therefore, do in one sense succeed where trade 
unions fail; that is to say, they do succeed in getting all 
to join them that they want; whereas the trade unions 
do not, the essential difference between the two being 
that the trust is essentially monopolistic whereas the 
trade union is essentially democratic. The one wants 
to benefit a few at the expense of the many; the other 
wants to benefit all at the expense of none. As the com- 
petitive system favors the policy of the trust and dis- 
favors that of the union, the trust succeeds where the 
union fails. 



THE RESULTS OF PROPERTY 161 

No one would accuse the organizers of a union of seek- 
ing to benefit a few at the expense of the many, and yet 
this under the competitive system is not only what hap- 
pens but what must happen. On the other hand, no one 
imagines that the organizers of a trust have any other 
intention: they deliberately set out to eliminate com- 
petitors for their own benefit and they have succeeded 
in their task to an altogether unexpected degree. 

It has been claimed, however, for the trusts that what- 
ever may be the private benefit of their stockholders, 
they do perform a great public service. 

Among the public services they were supposed to ren- 
der it was claimed that they would pay good wages and 
furnish steady employment. 1 Even the labor unions 
themselves were of this opinion. Their leaders testified 
that they did not fear industrial combination and that 
if combinations were able by virtue of their savings to 
increase the profits of industry, workingmen would be 
able by pressure to " maintain or increase their wages 
quite as readily as before the combinations were made." 2 
Another contention made for trusts was that they would 
lower prices. With the view of maintaining this con- 
tention, the trust magnates themselves testified to the 
enormous economies effected by combination, for the 
purpose of persuading us that the consumers would profit 
by these economies. Mr. Havemeyer was honest enough, 
however, to admit that he would be guided in fixing the 
price only by business considerations. But it was be- 
lieved at that time that business considerations would be 
sufficient to keep prices down and the experience of the 
Whisky Trust was cited to prove that it was impossible 
to maintain prices above a reasonable margin of profit. 

1 Report of the Industrial Commission, 1901, Vol. I, p. 29. 

2 Ibid., p. 31. 



162 WHAT CAPITALISM IS 

The Whisky Trust was organized in 1887 and after 
having lowered prices for the purpose of eliminating 
competitors, it brought the prices up to as high a level 
as had ever been reached before. The result of this was 
that at the end of 1888 prices fell, owing to a reorganiza- 
tion of the trust and to a subsequent raising of prices 
by the trust in 1891, only to be followed by a correspond- 
ing fall in 1892. And so prices went on reaching a very 
high level at the close of 1892, only to fall back to a low 
level in 1893; and again to a high level in 1894, only to 
go down so low in 1895 as to put the trust into the hands 
of a receiver. By this time the Whisky Trust had learned 
its lesson; it learned that if it endeavored to put the price 
of whisky up to an undue height, new distilleries were 
started to profit by these high prices, and the only way 
of avoiding bankruptcy was to maintain the price just 
high enough to return profits to the trust, but not high 
enough to encourage outside competition. 

Undoubtedly the opinion generally prevailed at the 
end of the last century that increase in price by the trust 
was not to be feared. But at that time trusts had not 
yet acquired the art of handling independent competitors. 
To-day the art has been acquired. Owing to the enormous 
capital they control and the enormous extent of territory 
they cover, they are in a position so to reduce prices in 
any one spot where competition becomes dangerous as 
to crush out the competitor in that place. They adopted 
this method recklessly at first, crushing out all com- 
petitors and then raising the price unduly. Now they 
have learned to maintain a group of competitors about 
them and to keep these competitors alive, keeping prices 
high so long as competition is not dangerous and depress- 
ing them just enough to crush out competition when it 
becomes dangerous. 



THE RESULTS OF PROPERTY 163 

The movement of prices since the end of last century 
is sufficient to demonstrate that trusts, far from reducing 
prices, are advancng them. 

It must in all fairness to trusts be admitted that the 
enormous increase in the annual output of gold tends to 
increase prices, and it is extremely difficult to state just 
how much of the advance in price since the end of last 
century is due to the increased output of gold, and how 
much is due to deliberate advance on the part of the 
trusts. We have, however, a guide in the relation be- 
tween increase of wages and increase of prices. If the 
advance in prices were due entirely to increased output 
of gold, wages ought to increase in the same proportion. 
But they do not. 

Of the opinion expressed at the end of the last century 
that trusts would improve the condition of workingmen, 
there is very little left to-day. 

From almost every point of view, trusts have since 
1900 disappointed expectations. It was claimed and with 
every show of reason that trusts would, by their control 
of the market, be able to adjust supply to demand and 
thus avoid the gluts that produce unemployment, 1 and 
that although the economies they practised might result 
in the shutting down of some factories and the discharge 
of employees, in the end the workingmen would gain 
because their employment would be steady and because 
trade unions would have only one employer to bargain 
with instead of many. 2 

1 "Most members of combinations feel that the tendency is to 
make work more permanent under the combination form of doing 
business, inasmuch as the combination is better able to adjust 
the supply of goods to the demand, and thus to secure regularity 
in their productive conditions. " Report of the Industrial Commis- 
sion, Vol. XIII, p. xxxi. 

2 "Some of the witnesses are of the opinion that the industrial 



164 WHAT CAPITALISM IS 

How far has experience justified these anticipations? 

Far from diminishing unemployment, the reign of the 
trusts has resulted in the most intense and widespread 
depression that we have any record of. 1 Far from 
benefiting the unions, trusts have crushed unions out 
of existence. Far from raising wages and shortening 
hours, the employees of the Steel Trust in Pittsburg are 
to-day working twelve hours at $1.80 a day, and once a 
fortnight twenty-four hours in a single shift; whereas 
miners in the same district because their union has not yet 
been crushed by the Coal Trust, are working only eight 
hours at $2.36 a day. 2 And the Miners' Union has been 
saved from the trust only by what is still regarded by 
many as the improper personal intervention of President 
Roosevelt Oct. 31, 1902. 

The conditions of labor under trust rule cannot be 
better described than in the Survey, an investigation 
published not by Socialists, nor even by persons inclined 
towards Socialism, but by believers in and upholders 
of the competitive system : 3 

"With this number, Charities and The Commons com- 
pletes its presention of the findings of the Pittsburg 
Survey, as to conditions of life and labor of the wage- 
earners of the American Steel district. The gist of the 
situation, as we find it, is as follows: 

" I. An altogether incredible amount of overwork by 
everybody, reaching its extreme in the twelve-hour 

combinations give to the labor unions a decided advantage, inas- 
much as it enable them to deal with the trade as a whole instead 
of with separate manufacturers." Report of the Industrial Com- 
mssion, Vol. XIII, p. xxxii. 

1 Book II, Chapter I, Unemployment. 

2 Pittsburg Survey, Charities, XXI, p. 1063. 

3 Charities, XXI, p. 1035. 



THE RESULTS OF PROPERTY 165 

shift for seven days in the week in the steel mills and the 
railway switchyards. 

"II. Low wages for the great majority of the laborers 
employed by the mills, not lower than other large cities, 
but low compared with the prices — so low as to be in- 
adequate to the maintenance of a normal American 
standard of living; wages adjusted to the single man in 
the lodging-house, not to the responsible head of a family. 

" III. Still lower wages for women, who receive for ex- 
ample in one of the metal trades in which the proportion 
of women is great enough to be menacing, one-half as 
much as unorganized men in the same shops and one- 
third as much as the men in the union. 

"IV. An absentee capitalism, with bad effects strik- 
ingly analogous to those of absentee landlordism, of 
which Pittsburg furnishes noteworthy examples. 

" V. A continuous inflow of immigrants with low stand- 
ards, attracted by a wage which is high by the standards 
of Southeastern Europe, and which yields a net pecuni- 
ary advantage because of abnormally low expenditures 
for food and shelter; and inadequate provision for the 
contingencies of sickness, accident, and death. 

"VI. The destruction of family life, not in any imagi- 
nary or mystical sense, but by the demands of the day's 
work and by the very demonstrable and material method 
of typhoid fever and industrial accidents; both prevent- 
able, but costing in single years in Pittsburg considerably 
more than a thousand lives, and irretrievably shattering 
nearly as many homes. 

"VII. Archaic social institutions such as the alder- 
manic court, the ward school district, the family garbage 
disposal, and the unregenerate charitable institution, still 
surviving after the conditions to which they were adapted 
have disappeared. 



166 WHAT CAPITALISM IS 

" VIII. The contrast — which does not become blurred 
by familiarity with detail, but on the contrary becomes 
more vivid as the outlines are filled in — the contrast 
between the prosperity on the one hand of the most 
prosperous of all the communities of our western civiliza- 
tion, with its vast natural resources, the generous fos- 
tering of government, the human energy, the technical 
development, the gigantic tonnage of the mines and 
mills, the enormous capital of which the bank balances 
afford an indication; and, on the other hand, the neglect 
of life, of health, of physical vigor, even of the industrial 
efficiency of the individual. Certainly no community 
before in America or Europe has ever had such a surplus, 
and never before has a great community applied what it 
had so meagerly to the rational purposes of human life. 
Not by gifts of libraries, galleries, technical schools, and 
parks, but by the cessation of toil one day in seven, and 
sixteen hours in the twenty-four, by the increase of wages, 
by the sparing of lives, by the prevention of accidents, 
and by raising the standards of domestic life, should the 
surplus come back to the people of the community in 
which it is created/' 

It would be unfair, however, to the trusts not to rec- 
ognize that in spite of the shameful conditions they 
create for the majority they do benefit a minority to no 
small degree. The highly skilled are highly paid; they 
are fairly safe from unemployment; they are also fur- 
nished an opportunity of purchasing stock, of which this 
minority avails itself. The effect of the trust system on 
the workingman is very much like that of the trade union; 
both benefit the highly skilled and highly efficient, but 
at the expense of all the rest. 

Now those who believe in the competitive system re- 
gard this as proper; and that the highly skilled and 



THE RESULTS OF PROPERTY 167 

highly efficient should fare better than the lazy and 
vicious is equally a part of the Socialist creed. All that 
the Socialist asks is that the punishment for falling short 
of the highest skill and the highest efficiency be not so 
severe as that described by the Pittsburg Survey; and 
this not only in the interest of the victim, but in that of 
the community of which he forms an essential part. It 
is because Socialism proposes a plan for giving to the 
efficient what their efficiency earns without com- 
mitting the inefficient to a life of degradation, that 
it is entitled to the consideration of practical business 
men. 

The degradation of the majority is not the only evil 
that results from the trusts. The rich are accustomed 
to look upon this evil as necessary and, therefore, one 
that they cannot hope to do more than mitigate by 
philanthropy. They seem unconscious of the goal to 
which this evil is inevitably driving them; and it is to 
this goal that I want above all to direct their attention. 

(a) The Conflict Between the Trust and the Trade Union 

It might seem as though the title for this section ought 
to be the conflict between capital and labor rather than 
the conflict between trusts and trade unions. This, how- 
ever, is a mistake. So long as labor and capital were 
disorganized, there was not much danger in the conflict 
between the two. The employer was too strong and he 
had on his side in case of disturbance, the police, the 
militia, and the law. The moment, however, that labor 
became organized, it became too powerful for the police; 
it became dangerous even to the militia; and it has in 
England been strong enough to change the law ; and this 
in spite of the fact that the organization of the working- 



168 WHAT CAPITALISM IS 

man in unions has compelled the employers to combine 
in associations and trusts. 

Again, although all violence is injurious to individuals, 
the violence to which unorganized workingmen resort in 
local disputes with their employers, however injurious to 
local interests, tends to be essentially temporary and does 
not tend to overthrow economic or social institutions. 
The effect of organization, however, expresses itself in 
the magnitude of the conflicts to which it gives rise; as 
for example, the Homestead strike in 1892, the Pullman 
strike in 1894, and what was practically equivalent to a 
civil war in Colorado during 1903. 

It is generally believed that violence is the peculiar 
weapon of the workingman. This again is a mistake. 
Employers have often been the first to have recourse to 
violence and under conditions which hardly seem pardon- 
able. That a striking employee should be enraged at 
seeing his place taken by strikebreakers and should be 
driven by his rage to violence, is easily understood; but 
that employers, merely for the sake of keeping down 
wages and making more profit, should have recourse to it 
seems altogether unjustifiable. It is a matter of official 
record that the Carnegie Steel Company opened negotia- 
tions with Robert A. Pinkerton for armed men nineteen 
days before any strike occurred. 1 The report also says 
that there was "no evidence to show that the slightest 
damage was done or was attempted to be done to property 
on the part of the strikers," 2 and so far as acts of violence 
are concerned, a personal investigation of the Colorado 
strike satisfied me that the Employers' Association was 
just as guilty as the miners. An impartial account of 

1 Senate Reports, 52d Congress, 2d session, Vol. I, Rept. No. 
1280, p. xiv. 

2 Ibid., p. xiii. 



THE RESULTS OF PROPERTY 169 

this struggle is to be found in the Political Science 
Quarterly i published by a board of which J. Pierpont 
Morgan is a member, and which cannot be accused there- 
fore of tenderness to miners or leanings towards Socialism. 
It is difficult to justify the action of the mine owners in 
removing Moyer, Haywood, and Pettibone under the 
circumstances described by Judge McKenna in his dis- 
senting opinion. 2 

If the trust managers have deliberate recourse to 
violence and questionable methods in their conflict with 
labor which involve merely a question of more or less 
profit, is there not excuse for the workingman who has 
at stake his very livelihood and that of his wife and 
children? 

There are elements, however, in the coming conflict 
which to my mind make it clear that notwithstanding 
the enormous advantages which capital has over labor, it 
is labor and not capital that in the end will triumph. To 
understand these elements it is indispensable to consider 
the character of the advantages which the trusts have over 
the trade unions, and the character of the advantages 
which the unions have over the trusts. 

(b) Advantages of Trusts over Unions 

So far in America the conflict between trusts and unions 
has been confined to the economic field, and in the eco- 
nomic field it must be admitted that trusts have the 
advantage. In the first place, as has already been inti- 
mated, the trusts have at stake merely a matter of more 
or less profit. The trust can for the purpose of crushing 
the union, sacrifice part of its profit without material 

1 Political Science Quarterly, March, 1908. 

2 See Appendix, p. 424. 



170 WHAT CAPITALISM IS 

damage. The trust in this respect is in an infinitely 
better condition than the isolated employer, for whom a 
strike very often means bankruptcy. This is not the case 
with the trust. Its capital is too large and its operations 
are conducted over too great an area for any strike to 
threaten insolvency. 1 

Moreover, an isolated employer is far more at the mercy 
of the employees than a trust, because a strike very often 
deprives him of custom. The orders he cannot fill are 
filled elsewhere and he may never recover the custom he 
has in this manner lost. The trust, however, can allow 
a strike to take place in one factory without for that 
reason failing to fill all its orders; for it can transfer 
them to another of its numerous factories in another 
place. That this is regularly done by the trust is a matter 
of common knowledge. The case cited by the Industrial 
Commission 2 is that of the American Smelting and Re- 
fining Company which "continued its Business in the 
districts where there was no strike, transferring the work 
as far as possible." 

In America, at any rate, the trusts have also on their 
side not only the police and the militia, but the law. 
The courts have decided that in the case of strikes and 
boycotts the courts can by injunction commit for contempt 
and punish by imprisonment those who violate their 
orders. These questions have been carried to the highest 
court and all further attempts on the part of labor to fight 
these questions in the courts are practically certain to bej 

1 Many workingmen still believe in the possibility of strikes and 
even of a general strike. I do not take account of such strikes, 
because they have not yet occurred and labor does not seem or- 
ganized upon a sufficiently comprehensive scale to make such 
strikes possible. 

2 Report of the Industrial Commission, Vol. XIII, p. xxxi. 



THE RESULTS OF PROPERTY 171 

unavailing. The remedy of the Federation of Labor is 
not to dispute these decisions in the courts, but to secure 
new legislation reversing existing decisions on this subject. 

The English unions have discovered this and, by the 
organization of their Labor party, have wrested from the 
British Government the trades dispute law which has 
settled these questions in their favor. 

So long as unions persist in fighting trusts exclusively 
on the economic field and in the law courts, the unions 
seem bound to suffer defeat. 

There is one weakness in the armor of the trusts to 
which attention has not yet been sufficiently directed. 
Trusts suffer more from their victories than from their 
defeats; for a defeat as to the length of hours or rate of 
wages, while it strengthens labor a little, does not weaken 
the trust much. But every victory of the trust is the 
greatest calamity to which it seems at present exposed; 
for every victory tends to shift the arena from the eco- 
nomic field, where the trust is invincible, to the political 
field, where labor has every advantage. This will become 
clear when we examine the advantages of unions over 
trusts. 

(c) Advantages of Unions over Trusts 

The larger the number of workers in every industry, 
the weaker are they on the economic field. It has been 
pointed out that unions tend to divide labor. They not 
only separate the labor world into two bitterly hostile 
classes — organized and unorganized — but by the high rate 
of wages that they demand they tend also to create 
jealousy within the trade union between the efficient who 
can earn these high wages and the less efficient who cannot. 
If the working population were so small that the demand 



172 WHAT CAPITALISM IS 

for labor was greater than the supply, then indeed the 
unions might control the situation. But experience has 
shown that, without accepting the exaggerations of 
Malthus, there is always a greater supply of labor than 
demand. Even in the most prosperous times between 
3 and 4 per cent of the trade unions are unemployed 
and, outside the unions, there is a mass of unorganized 
labor, a great part of which is either working for wages 
insufficient to support life or is not working at all. 
These things inevitably produce hostility between the 
prosperous and highly paid members of the union and all 
the rest; and this hostility is a source of weakness in the 
economic struggle of capital against labor. The unions, 
too, instead of being able to apply their funds to maintain 
strikes, have to apply a large part of these funds to the 
support of unemployed, whether through sickness or 
through industrial depression. 

Upon the economic field, therefore, numbers tend to 
cripple the worker in his fight against capital. On the 
political field, on the contrary, the larger the number of 
workers, the stronger they are; for every wage-earning 
man has his vote, and the vote of every wage-earner 
counts as much as that of every capitalist. On the 
political field there need be no division in the ranks of 
labor — organized and unorganized labor can unite on a 
platform looking to the political subjection of their com- 
mon master. Indeed, if the trusts and employers were to 
succeed in the task which they seem to have set themselves 
— the destruction of every trade union — they would by so 
doing put an end to the principal obstacle which now 
prevents workingmen from uniting upon a common plat- 
form, for the suppression of unions wo'uld mean two 
things: it would persuade the defeated unionists that 
their only chance of successfully fighting capital was on 



THE RESULTS OF PROPERTY 173 

the political field; and it would put an end to the hostility 
between organized and unorganized labor that is the 
principal obstacle at this moment to united action of any- 
kind. Moreover, the workingman could so frame his 
political program as to secure the alliance of the whole 
exploited class; the small farmer, the domestic, the clerk, 
and all those who, out of interest or sympathy, find them- 
selves arrayed against the exploiting class. 

The discovery that the workingman is no match for his 
employer on the economic field having already been made 
in England, the Labor party there has no less than 40 
members in Parliament, and this small contingent has been 
strong enough to obtain the legislation above referred to. 
It is the sense of inferiority on the economic field that has 
organized the millions who are every year swelling the 
ranks of the Socialist party in Europe. 

The shortsightedness of employers in failing to take 
account of this fact has its humorous side. The employee 
was not very long ago ignorant and incapable of organiza- 
tion — economic or political — and without any vote on 
public affairs. It was only upon condition that he should 
remain ignorant and incapable of political organization 
and without any voice in public affairs that he could con- 
tinue to suffer the domination of his employer — such as 
is described in the Pittsburg Survey. Yet the employer 
has given to every employee an equal vote with himself 
in public affairs, so that to-day the employees outvote 
the employers. Not content with this, and fearful lest 
the employee should not be able adequately to use his 
vote, the employer has covered the country with school- 
houses for the purpose of teaching the employee how to 
use it. Yet employers proceed upon the assumption 
that the intelligent, educated workingman of to-day, 
armed with a vote and capable of the organization dis- 



174 WHAT CAPITALISM IS 

played in his unions, will continue to endure such condi- 
tions as are described in the Pittsburg Survey as patiently 
in the future as he has done in the past! 

So trusts continue complacently to crush out unions, 
oblivious of the fact that every union crushed drives its 
members to Populism, Socialism, Anarchism, pauperism, 
and crime. 

Of all the folds ready to receive the unfortunates driven 
out of their unions by the trusts, which is the one least 
likely to prove dangerous to the state? This question does 
not seem to concern the trusts at all. They consider all 
these "isms" as equally vile, impractical, and obnoxious. 
Yet, if they would only give to this matter one-half the 
attention that they give to their business affairs, they 
could not fail to see that every union they crush raises 
for them a crop of political enemies who, if they show 
as much ability in political organization as they have 
shown in economic organization — and there is no reason 
why they should not — cannot but eventually secure a 
large majority in our legislatures. When they have done 
this; when they have the writing of a new constitution; 
when the police, the militia, the army, and the law courts 
are on their side, is it not better that this majority be 
intelligent and educated, as it might if Socialism were 
rightly understood, and not uneducated and violent, as 
it will certainly be if Socialism is not rightly understood? 
The conclusion to which we seem to be driven is that, 
so long as labor struggles with capital on the economic 
field through strikes, boycotts, and litigation, it is bound 
to be beaten; but that every victory of capital on the 
economic field shortens its reign; for it drives labor to 
abandon the economic field, where it is weak, for the 
political field, where it is strong; and that the evidence 
of constructive ability and self-restraint exhibited by 



THE RESULTS OF PROPERTY 175 

labor in the organization and administration of the 
unions, indicates that that same ability exercised in the 
political field will make it invincible there: 

"We are many; they are few." 

If this be so, then capital can no longer afford to 
disregard or misrepresent the political aspirations of the 
army of labor. It may indeed turn out in the words of 
the Cumsean Sybil: 

il Via prima salutis 
Qua minime reris Graia pandetur ab urbe." 

Our way of safety may be — not in the defeat of labor — 
but in its enlightenment. 

We have before us two alternatives : We can continue 
to fight labor; to crush it; to create unemployment one 
day and wring our hands over it the next; to arm labor, 
educate it, and force it to organize an army of discontent 
that will eventually outvote capital and, with little or 
no preparation for its task, seize the reins of government. 
Or we can leave the fighting of labor to the trusts from 
which the whole public suffers as well as the workingman, 
and ourselves join in a reorganization of political forces 
that will make the legitimate demands of the disinherited 
our own, and at last lay the foundations of the Democracy 
that Lincoln through the smoke of the Civil War dimly 
foresaw, 



CHAPTER VI 
MONEY 

No attempt will be made in this chapter to enter upon 
the disputed questions regarding money, but only to 
point out undenied and undeniable facts in connection 
with its use and abuse. 

Coin, whether gold or silver, is used all over the world 
as the medium of exchange. But gold and silver available 
for the purpose of coin are limited in amount and totally 
inadequate to serve as mediums of exchange without the 
assistance of other devices. Thus banks of issue are 
organized for the purpose of issuing paper money. This 
money is upon its face redeemable in coin, but banks of 
issue, relying upon the probability that all paper issued 
will not be redeemed on the same day, issue far more 
paper money than they have reserve in coin. In England, 
this reserve is notably small. 

Business, too, is conducted largely on credit; that is to 
say, the trader buys goods not with coin, but with notes 
or promises to pay gold, relying upon the probability 
that he will sell the goods before his notes come due and 
thus be able to meet his notes with the proceeds derived 
from the sale of the goods purchased with these notes. 

Industries, railroad companies, and transportation com- 
panies also use credit for the purpose of building and 
running their roads and factories. This credit takes the 
shape of permanent bonds and temporary aecommoda- 



MONEY 177 

tions of the same character as the notes used by private 
traders. The total number of bonds outstanding at 
par amount to-day in the United States alone to $13,- 
500,000,000.* It is through the ability of railroad com- 
panies to issue bonds and credit notes that they are 
enabled in prosperous periods to extend their roads and 
factories. 

Farmers also borrow largely upon their farms for the 
purchase of implements, live stock, improvements, etc. 
Recent figures of bonded indebtedness are not to be ob- 
tained; but they figure in the billions. 

Again, cash payments are no longer made in coin; 
they are for the most part made by check. Checks are 
not paid in coin; they are cleared through clearing houses; 
the banks in every financial center belong to a clearing 
house through which they daily settle with one another, 
paying only differences of accounts in cash. Thus, in 
1906, the total transactions of fifty-five banks in New 
York city amounted to over $103,000,000,000; yet the 
balances paid in money during the year only amounted 
to about $3,000,000,000— a proportion of 3.69. So that 
through the clearing-house system instead of exchanging 
gold to an amount of $103,000,000,000 the whole business 
was transacted with only 3.69 per cent thereof in coin. 

The above figures tend to show how small a relation 
is borne by coin to the total exchanges of the world. 
Indeed, although coin is still the ultimate medium of 
exchange, commercial and industrial transactions are con- 
ducted for the most part through an enormous system of 
credit built upon a comparatively small amount of coin. 

The importance of this is considerable, for it puts those 
who have coin and those who handle coin in a position 

1 An article by Charles A. Conant in the Atlantic Monthly, Jan., 
1908. 



178 WHAT CAPITALISM IS 

which enables them to control the industrial and com- 
mercial activities of the Nation. This feature of our 
money system occasions what are called " financial 
crises'' as distinguished from commercial crises. Com- 
mercial crises and industrial crises are due to overpro- 
duction. Financial crises are produced for the most 
part by a breaking down of credit. 

Credit may be broken down in many ways. A break- 
down may be due to inability on the part of those who 
handle coin to meet their obligations in coin. It may, 
however, be due to the unwillingness of those who have 
and handle money to put this money at the disposal of 
the industrial public. It is sometimes occasioned by both. 

Money is indispensable to the working of the industrial 
system. It may be regarded as the blood of the industrial 
system because no farmer can operate his farm, no factory 
owner his factory, no railroad company its road without 
money or the equivalent of money — credit. And if 
money can be compared with the blood in the human body, 
the banking system must be regarded as its heart; the 
organ that keeps money in circulation, accommodates 
circulation to the needs of the body, furnishes the economic 
body with as much as at periods of exercise it needs; and 
moderates its circulation when at periods of repose the 
economic body is less in need of it. It is hardly necessary 
to point out the extreme importance under these con- 
ditions that the heart of this system act for the benefit 
of the system, and have at no time an interest of its own 
to act independently of the system or in a manner hostile 
to it. Now this is exactly the evil of existing monetary 
conditions. Those who have and handle money have an 
interest of their own to serve. While it is generally to 
their interest to use money in making the community 
prosperous, it is at certain critical periods to their interest 



MONEY 179 

on the contrary to withhold money. This is the point 
upon which emphasis must be put. Let us, with a view 
to understanding this, consider into how few hands the 
control of coin tends to be concentrated; and how easy 
it is for these few to serve their own interests at the ex- 
pense of the public by withholding coin at moments of 
utmost need. 

A very brief study of the movements of coin in the 
United States will demonstrate the very few hands in 
which the control of coin in the country is vested: 

Every trust, every corporation, every railroad company 
makes payments to its stockholders at stated intervals 
consisting of dividends on stock and interest on bonds. 
These amounts are large. In 1905 dividends amounted 
to $840,018,022, and interest to $636,287,621— together 
a billion and a half. 1 Most of this is paid in New York 
and produces a regular flow of money from the great cor- 
porations to the New York banks. 

The great life insurance companies have their principal 
offices in New York and there flow daily into the coffers 
of these companies millions of dollars of premiums, 
amounting in the year to nearly half a billion ($492,676,- 
987 in 1908). During the last half century, 1859-1908, 
the income from premiums reached the enormous total 
of $7,870,892,759. 2 All these go into the hands of New 
York banks and trust companies. 

These moneys are, in the ordinary course of business, 
returned to the industrial public in the shape of accom- 
modations to banks, loans to farmers, factories, railroad 
companies, etc.; and if these enormous sums that go 
into the hands of the Wall Street Group are not returned 
to the industrial system, the industrial system must 

1 Atlantic Monthly, Charles A. Conant, Jan., 1908, p. 101. 

2 Insurance Year Book: Life and Casualty sections, 1909, p. 236-7. 



180 WHAT CAPITALISM IS 

perish just as the body must perish if its vital functions 
are not furnished with blood. But as has been stated, 
it is to the interest of the Group to keep the industrial 
system prosperous and, therefore, in prosperous times 
this amount gets back to the country again, the Group 
receiving a profit on taking in these moneys and on the 
paying out of them. One thing, however, is certain — 
that the Group can by withholding money make money 
scarce. It can by releasing noney make it plentiful. 
The power given to the Group by this order of things is 
incalculable. If the Group desires to issue securities, 
it has an interest in making money plentiful. If the 
Group desires to purchase securities cheaply, it has an in- 
terest in making money scarce. The Group is therefore 
in a position where it can serve its own interests whatever 
be the direction these interests take. 

A banker once described to me the situation as follows : 
"The bulk of business is conducted with credit. An 
enormous credit system is built upon a relatively small 
amount of gold. The bankers control the gold; by con- 
trolling the gold they control credit; by controlling credit 
they control business. 

"This credit and gold system can be compared to an 
enormous system of reservoirs and irrigation works, the 
sluices of which are all opened and closed by electricity. 
It takes a very minute amount of electricity to open and 
close the sluices; but the man who has control of that 
small amount of electricity has the whole irrigation sys- 
tem at his mercy. By pressing a button he can furnish 
water to one region and take it away from another; and 
if water has been largely used — as in the case of over- 
investment — he can, by withholding water altogether, 
put the whole population of the land irrigated by the 
system on its knees/! 



MONEY 181 

Let us select as a concrete illustration of the workings 
of this system the events of 1907: 

The year prior to the October panic of 1907 was the 
most prosperous year the country had ever seen. The 
balance of trade in our favor was $4-46,000,000 *; that 
is to say, Europe owed us $446,000,000 on the year's 
transactions; the value of our crop exceeded that of the 
previous year by over $480,000,000; the net earnings of 
our railroads exceeded those of the previous year by over 
$260,000,000; the deposits in our banks exceeded those 
of the previous year by over $880,000,000; the cash held 
by our banks exceeded that held in the previous year by 
over $100,000,000; and the Treasury of the United States 
was bulging with ingots of gold. Nevertheless, the 
bankers knew that there had been overinvestment. In 
fifteen years the banks had invested in stocks and bonds 
no less than $437,000,000. In three years the trust 
companies had invested no less than $643,000,000 in these 
securities. 2 

Moreover, immense sums had been loaned by trust 
companies and cash reserves had fallen from nearly 18 
per cent in 1897 to a little over 11 per cent in 1907. 3 
The Wall Street Group knew that there had been over- 
investment. As one of them said, "We are being over- 
whelmed by our own prosperity." The breeze was blow- 
ing too strong and we were carrying too much sail. The 
Wall Street Group, however, knowing that a crisis was at 
hand and determined to realize the fullest possible price 
for stocks, began selling securities in January, 1907, 
giving rise to what has been termed "the rich man's 

Statistical abstract of the U. S., 1908. 

2 " Monetary and Banking Systems." By Maurice L. Muhleman, 
formerly U. S. Deputy Assistant Treasurer at New York, 

3 Ibid. 



182 WHAT CAPITALISM IS 

panic/' which climaxed in March. 1 Securities fell in con- 
sequence of this selling on an average of about 40 points. 
This tended to cripple all weak financial institutions which 
were no longer able to sell securities with a view to meeting 
obligations except at a loss. But this weakness did not 
express itself until October. 

The first to suffer was the brokerage firm of Otto 
Heinze & Company, well-known speculators, particularly 
in copper stocks. The next to fall were Charles W. 
Morse and E. R. Thomas, also speculators and directors 
of the Mercantile National Bank, and others. All banks 
controlled by these men at once showed weakness. But 
the panic did not reach its climax until the Knickerbocker 
Trust Company became involved. To understand the 
situation of the Knickerbocker Trust Company, a word 
must be said regarding trust companies and their relations 
to banks. 

Banks in the city of New York are required by law to 
keep a reserve of 15 per cent of their deposits in coin. 
Trust companies, not being subject to the banking law 
in this respect, are not called upon to maintain this 
reserve. They have, therefore, an advantage over banks 
because they can invest the whole of their deposits instead 
of keeping a part of them uninvested in coin. The natural 
hostility that would arise between trust companies and 
banks owing to this difference was eliminated in almost 
every case because trust companies were controlled by 
the banks. The Knickerbocker Trust Company, how- 
ever, formed a notable exception to this rule. 

Owing to the genius of its President, Charles T. Barney, 

1 According to computations made by Mr. James H. Brookmire 
on quotations of twenty representative railroad stocks, these 
reached at the highest point in 1906, 138. In March, these se- 
curities had gone down to 98. 



MONEY 183 

the Knickerbocker Trust Company had increased its de- 
posits to over eighty millions in 1907. Mr. Barney did 
not belong to the Wall Street Group in the sense of the 
word that he acted independently of it, and his extraor- 
dinary enterprise and ability aroused the jealousy of the 
Group. In 1907, the institution having 8,000 depositors 
with total deposits of $80,000,000, became an independent 
power which was not to be tolerated by the Group. 
Under these conditions, it could not be expected that the 
Group would make any extraordinary effort to save the 
Knickerbocker Trust Company. It was to the interest of 
the Group that the Knickerbocker Trust Company should 
cease to remain an independent financial pow r er. 

Everybody knew that the Knickerbocker Trust Com- 
pany, though temporarily embarrassed, was perfectly 
sound. The receivers, appointed when its doors closed, 
so stated and subsequent events have proved that the 
receivers were right. No one doubts the ability of the 
Group to save the Knickerbocker Trust Company if it 
had chosen to do so. But the Group had in its hands an 
instrument by means of which the ruin of Mr. Barney 
could be effected : The clearing house has never admitted 
trust companies to membership, because trust companies 
were not under the obligation to maintain the 15 per cent 
reserve above referred to. This matter had come up 
frequently for discussion and the clearing house had 
insisted that all trust companies applying for membership 
to the clearing house should keep a reserve at of least 
10 per cent. This the trust companies declined to do; 
but they nevertheless profited by the clearing-house 
system by employing banks that were members of the 
Clearing House Association to do their clearing for them 
— a dangerous situation that proved the ruin of Mr. 
Barney. The Bank of Commerce was the clearing-house 



184 WHAT CAPITALISM IS 

agent of the Knickerbocker Trust Company; and the 
Bank of Commerce was controlled by the Wall Street 
Group. Under these conditions, the Knickerbocker Trust 
Company was at the mercy of the Wall Street Group. 

The Bank of Commerce publicly announced its refusal 
to clear any longer for the Knickerbocker Trust Company 
on the 21st of October. 1 Mr. Charles T. Barney was told 
that no help would be given to the Knickerbocker Trust 
Company unless he resigned. Understanding this to 
mean that help would be given if he did resign, he resigned; 
but help was withheld; the Knickerbocker Trust Company 
was allowed to go into the hands of receivers, and Mr. 
Barney committed suicide. 

Mr. Barney's corporation was not the only one upon 
which the Group had its eye. The Group is interested in 
the General Electric Company, the largest electrical com- 
pany in America. The only serious rival of the General 
Electric Company in the country is the Westinghouse 
Company. Westinghouse was doing a larger business 
than he had capital for. "He was overwhelmed by his 
own prosperity." All Westinghouse needed at that time 
was money in order to protect his business. This money 
was refused to him. 

The Group is also interested in the railroads of the 
country and indeed controls them. It is one of the bad 
features of our railroad system that it almost everywhere 
controls steamship lines and thus prevents the public 
from having the benefit of cheaper water rates by exacting 
the same rates on steamboats as upon land. Morse with 
the supposed backing of the Knickerbocker Trust had 
organized a system of steamship companies w T hich were 
running independently of the railroads and threatening 
their monopoly of freight rates. It was necessary that 

1 N. Y. Press, Oct. 22, 1907. 



MONEY 185 

these steamship lines should be controlled by the various 
railroad systems with which these lines competed, and 
Morse's steamship company was forced into the hands of a 
receiver. 

But there was another corporation of still more im- 
portance to the Group — the Tennessee Coal and Iron 
Company. 

The Steel Trust had never been able to purchase this 
company, and this company was in a measure indis- 
pensable to them. The Tennessee Coal and Iron Com- 
pany had the extraordinary advantage of owning inter- 
bedded coal and iron; that is to say, coal and iron in the 
same spot. It was thus relieved of the necessity of trans- 
porting coal several hundred miles to iron ore or iron ore 
several hundred miles to coal. This enabled the Tennessee 
Coal and Iron Company to fix a price for steel indepen- 
dently of the Steel Trust. 

As has been explained, although trusts seek to have 
weak independent concerns in existence if only to prevent 
strong independent concerns from being organized, they 
cannot afford to have an independent concern competing 
with them which is able to fix prices lower than their 
own. For this reason, the Wall Street Group availed 
itself of the panic to get control of the Tennessee Coal and 
Iron Company. 

Upon the testimony of Oakleigh Thorne, President of 
the Trust Company of America, and George W. Perkins 
of the firm of J. P. Morgan & Company, who is a member 
of the Finance Board of the United States Steel Corpora- 
tion, before the Senate Committee on January 19, 1909, 1 
it appears that a syndicate had been organized for the 
purpose of acquiring the stock of the Tennessee Coal 
and Iron Company. Mr. Oakleigh Thorne was a member 

1 See N. Y. Times, Jan. 30, 1909. 



186 WHAT CAPITALISM IS 

of this syndicate, and the Trust Company of America, 
of which he was president, had loaned on November 1, 
1907, $482,700 to this syndicate against the stock of the 
Tennessee Coal and Iron Company as collateral. It 
seems that the Trust Company called this loan and that 
although the stock of the Tennessee Coal and Iron Com- 
pany was a dividend-paying stock and quoted at 119, 
the syndicate found it impossible to borrow money upon 
it. The only condition upon which they could borrow 
money was selling out to the Steel Trust. 

The Steel Trust gave in exchange for the Tennessee 
Coal and Iron Company stock at 119 its own second 
mortgage bonds, quoted on the market at that time at 
82, and as soon as this exchange was effected the syndicate 
was furnished with all the money it needed. Wall 
Street loaned to the syndicate against steel second 
mortgage bonds the amounts which had previously been 
refused upon the Tennessee Coal and Iron Company 
stock. In other words, the Wall Street Group by re- 
fusing to loan money to the syndicate against the Ten- 
nessee Coal and Iron Company stock, compelled the 
syndicate to sell this stock to the Steel Trust by agreeing 
to loan to the syndicate against Steel Trust second 
mortgage bonds at 82 what they refused to loan to the 
same syndicate on Tennessee Coal and Iron Company 
stock at 119. 

The New York Times says on this subject: 1 
"What inquiring Senators want to know is, How was 
it possible for a small group of bankers to get together 
and, merely by agreement, force out one security by 
giving preference to another less valuable? This power 
is regarded as highly dangerous to all classes of securities, 
placing them entirely at the mercy of the Wall Street Group . ' ' 

1 N. Y. Times, February 1, 1909. 



MONEY 187 

The power of the Wall Street Group to which the 
Times objects is in times of panic reinforced by no 
less a power than the United States Government. The 
United States differs from other countries in not having 
a government bank for receiving government deposits 
and distributing them in the ordinary course of banking 
business. The result is that the receipts of the govern- 
ment accumulate in the United States Treasury, and 
this tends to increase stringency in periods of panic. 
It has become, therefore, a rule of the government to 
step in on such occasions and deposit with its national 
banks a sufficient amount to relieve stringency. It will 
be readily seen that this intervention of the Secretary of 
the Treasury, while indispensable to the public welfare, 
constitutes a great resource to the Wall Street Group. 
For the Group can, by withholding cash at periods of 
stringency, practically compel the government to come 
to the relief of the market when, for purposes of its own 
the Group decides to withhold funds. And as the Group 
includes the best-informed persons regarding the finances 
of the country, it is to the Group that the Secretary of 
the Treasury naturally goes for advice on these occasions. 
The Wall Street Group therefore occupies a position 
which permits it to call upon the government for funds 
when it desires to hoard its own funds for its own pur- 
poses. 

Thus we find Secretary Cortelyou in daily conference 
with the Wall Street Group at this period; and after the 
Knickerbocker Trust Company closed its doors on the 
22d of October and receivers had been appointed for the 
three Westinghouse firms on the 23d, Secretary Cortelyou 
deposited $25,000,000 in the New York banks indicated 
by the Group. This was just sufficient to prevent ruin 
but not sufficient to relieve stringency. On November 



188 WHAT CAPITALISM IS 

4th, Judge Gary and Mr. Frick went to see the President 
and explained to him that the purchase of the Tennessee 
Coal and Iron Company stock by the Steel Trust was 
necessary "in order to stop the panic." x The President 
on the same day wrote a letter to the Attorney-General, 
subsequently communicated to the Senate, in which he 
explained that in view of the fact that such a purchase 
would tend "to stop the panic" and that it would not 
give the Steel Trust more than 60 per cent, of the Steel 
industry, he did "not feel it a public duty to interpose 
any objection." 

The purchase of the Tennessee Coal and Iron Company 
having been effected, the United States Government was 
once more called upon by the Group and on November 17, 
the President and Secretary Cortelyou announced the 
issue of 2 per cent Panama bonds for an amount of 
$50,000,000, and 3 per cent on certificate indebtedness 
to an amount of $100,000,000. By this time, however, 
the Group had decided that there was no necessity to 
maintain panic conditions, and the issue of these bonds 
was arrested, so that only one-half of the Panama bonds 
and only $15,000,000 of the Treasury certificates were 
allotted. 

It has been intimated that the Wall Street Group dur- 
ing the whole of this panic was in possession of funds 
which it purposely withheld. This intimation seems 
justified by the events which immediately followed the 
purchase of the Tennessee Coal and Iron stock by the 
Steel Trust. In November newspapers informed us 
that our bankers were engaged in "buying gold" in 
Europe, and during November no less than $63,000,000 
were imported and in December a further $44,000,000 
were imported; together— over $100,000,000. It is a 

1 The N. Y. Times, Jan. 7, 1909. 



MONEY 189 

somewhat singular thing that the public does not seem 
to have asked for information as to what was meant by 
this singular expression "buying gold." 

The machinery through which gold was brought over 
to America in November and December was the follow- 
ing: Our farmers had already produced crops and sold 
them to Europe; the 1907 cotton crop began to move 
in August — a large part of it was in Europe before the 
panic. Our wlieat crop, though late, was already partly 
in Europe and on its way there. Those who had pro- 
duced and sold these crops had drawn against their ship- 
ments. These drafts are called "cotton bills" — "wheat 
bills." Certain bankers with connections abroad make 
it their special business to buy these bills and present 
them for payment in Europe at a minute profit called 
"exchange." But these bankers could not, during the 
panic, borrow money as usual to buy these bills; and they 
did not dare to use the money of their depositors for this 
purpose when they were under imminent danger of a 
run. So these bills became a drug on the market; they 
could be got for four cents in the pound cheaper than in 
average years; and at this price, and at an exceptional 
profit, the Wall Street Group went into the market and 
bought them up, presented them for payment and got 
all the money from Europe that was wanted. This is 
the process that was called "buying gold." But who had 
gold with which to buy these bills? Who had been hoarding 
goldf 

What do these facts disclose? They disclose that at 
the time when the Wall Street Group refused help to 
the Knickerbocker Trust it had at its disposal the gold 
in the United States Treasury — did not Cortelyou actually 
put this gold at its disposal? — the credit of the United 
States Government — did not Cortelyou at its bidding 



190 WHAT CAPITALISM IS 

issue all the bonds he was told to issue? — and enough 
money of its own at the proper moment to purchase 
cotton and wheat bills at panic prices, so that every ship 
that in November and December sailed from Europe 
to New York came laden with gold? 

No one can, I think, deny the power of the Group 
after a fair consideration of these incidents. Let us see 
how this power was exercised as regards the city of New 
York. 

The Comptroller in a report published in November, 
1907 (pages 5 and 6) showed that the city had not only 
voted, but appropriated over $195,000,000 for, public 
works, much of which was urgently needed by the city 
and some of which ought to have been completed four 
years before. Yet this city of four million inhabitants, 
whose property is underassessed at $7,000,000,000, was 
not able to employ its thousands of unemployed at this 
urgently needed public work because, as Comptroller 
Metz stated at a crowded meeting, Mr. J. Pierpont Morgan 
would not give the money to do it with, and the city 
could get it from no one else} 

Morgan allowed the city in October to issue $30,000,000 
of its bonds at 6 per cent, but refused to permit any further 
issue until the last day of January. On January 29th, 
according to the New York Sun, 2 Mr. Morgan relented, 
and the Mayor of the city, the Comptroller, the Deputy 
Comptroller, the Corporation Counsel, and the City 
Chamberlain were summoned to Mr. Morgan's library. 
There at last the imperial consent was given; the richest 
city in America was allowed by Mr. Morgan to issue its 
own bonds, but not in an amount large enough to permit 
of any public works. So the unemployed were left to 
tramp sleeplessly through our streets. 

1 N. Y. Sun, Jan. 17, 1908. Ibid., Jan. 30, 1908. 



MONEY 191 

The Wall Street Group found another important element 
of profit in the fall of securities during the panic. It has 
been said that securities fell on an average 40 points 
when the Group sold securities between January and 
March, 1907. Mr. James H. Brookmire estimates that 
they fell another 16 points during the panic. The Group 
seemed informed as to the exact moment at which 
securities had reached the bottom price; that is, they 
knew the moment when the panic was intended to come 
to an end. I was fortunate enough to be informed by a 
member of the Group at the right moment. I purchased 
Northern Pacific stock upon the advice given and, in 
the course of the year, made 50 per cent profit there- 
upon. The Group that sold between January and March, 
1907, was in a position to buy back stock at less than one- 
half what they sold it for and, if they chose to realize at 
the present time, it would make an additional 50 per 
cent. In other words, it was in a position to make over 
100 per cent upon the whole transaction. When we 
keep in mind the enormous figures which the operations 
of the Group attain, the amount of profit realized upon 
this amount alone can be imagined. 

I do not wish to be understood as pretending that the 
facts marshalled in the foregoing pages constitute con- 
clusive proofs that the Group either made money by the 
panic, or withheld cash and credit for the purpose of mak- 
ing money. It is possible that the sales of stock between 
January and March and the repurchase of stock in 
November were effected solely w r ith a view to the public 
welfare; it is possible that the Knickerbocker Trust 
Company was allowed to go to the wall solely through 
error in judgment; it is possible that the Steel Trust 
reluctantly purchased the Tennessee Coal and Iron Com- 
pany as Messrs. Gary and Frick explained to the President 



192 WHAT CAPITALISM IS 

— solely for the purpose of " stopping the panic. " But 
practical business men are not accustomed to conclud- 
ing in this fashion. When the keenest appetites of 
humanity are whetted to the utmost and opportunities 
are extended for the satisfaction of these appetites, we 
generally conclude that these opportunities are not re- 
fused through pure asceticism; at least not by the Wall 
Street Group. 

When Mrs. Forrest brought action against her husband, 
Edwin Forrest, the actor, it was proved that the defendant 
had been seen visiting a house of ill fame; after he en- 
tered, a third story front room was lit; the room remained 
lit for about an hour; the light was extinguished at the 
end of this period, and a few momenta thereafter Mr. 
Forrest was seen leaving the house. His counsel main- 
tained that this was not conclusive evidence against him; 
that his profession obliged him to study human nature 
in every rank of life at close quarters, and that it had not 
been proved that he visited this house for any other 
purpose. Charles O'Conor in responding to this part 
of the defendant's argument, said: "I 'can see the de- 
fendant walking up the steps of this house of ill fame; 
I can see him enter and ushered into a roomfull of human 
nature exclusively of the female sex ready and willing 
to be studied at close quarters; I can see him select the 
one which he believed to be able to furnish the best 
opportunities for this purpose; I can see the two mount 
the stairs to the third story front and light the gas; and 
I can see them together there devote an hour to medita- 
tion and prayer. " The jury was satisfied with the 
evidence and rendered a verdict for divorce in favor of 
Mrs. Forrest. 

Whatever be the opinion, however, as to whether or 
not the Wall Street Group withheld funds to effect its 



MONEY 193 

purpose during the panic ; or whether it made money out 
of the panic, one thing is perfectly certain — it was in a 
position where it could have withheld money; it was in a 
position where it could have made money out of the panic. 
The question the community has to decide is whether 
it is willing to leave this power and this temptation to 
any group of bankers — either to the saints now in control 
of Wall Street, or possibly to their less worthy successors. 

In one of the standard English works on Money, 1 
George Clare points out the exorbitant power of the 
Secretary of our Treasury : 

"The New York Market is in fact at the mercy of an 
autocrat who, having full power to loose or bind large 
masses of currency at his absolute discretion, decides for 
himself whether and when money shall be cheap, and 
whether and when it shall be dear." 

This autocratic power is to-day at the disposal of the 
Wall Street Group — not owing to any improper influence 
of the Group; not through any improper conduct of the 
Treasury; but as a necessary result of existing condi- 
tions. And if Mr. Clare is right in criticising the wisdom 
of granting to the Treasury the autocratic power it now 
enjoys, how much more dangerous is it to grant this 
autocratic power not to an official who can be removed, 
but to a group of financiers who cannot be removed? For 
the power exerted by the Wall Street Group includes 
not only all the resources of the Treasury, but all the 
resources of the entire country. It holds the life blood 
of our economic system in its hands and, because it con- 
trols this life blood, it controls politics, education, morals, 
and religion. And this group of men was not elected 

1 "A Money Market Primer," by George Clare. Recommended by 
the Council of the Institute of Bankers. Revised edition, London, 
1896, p. 123. 



194 WHAT CAPITALISM IS 

to the position it now enjoys by the majority of our 
citizens; it has usurped the position by virtue of its con- 
trol over silver and gold. 

The fact, however, that the use of silver and gold as 
our sole medium of exchange gives men control of the 
most essential things in our life, whom we never elected 
to that office and who at critical times have a personal 
interest to serve in opposition to that of the public welfare, 
is not the only evil connected with their use : 

Silver and gold do not furnish us with constant stand- 
ards of values. At various periods in the history of our 
civilization, gold and silver have been discovered in 
enormous quantities, and the effect of the discoveries 
and the putting of the gold and silver on the market has 
been and must be of a character to seriously affect the 
interests of all. When the amount of gold and silver in 
circulation is increased, prices go up, but wages do not 
correspondingly rise; and the wage-earner is uncon- 
sciously robbed. He goes on receiving the same amount 
in gold or silver for his work, but the purchasing power 
of the wage he receives diminishes. Again, when con- 
traction takes place, as for example when silver was 
demonetized in 1893, a great wrong was done to the 
farmers who had borrowed money upon their farms; for 
by demonetizing silver, gold increased correspondingly 
in value and the farmer was called upon to pay his 
mortgages with money worth far more than it was prior 
to the demonetization of silver. 

One thing, however, we want to bear in mind, that 
although farmers suffer by the demonetization of silver 
and wage-earners suffer by the demonetization of silver, 
and no change in the amount of silver and gold used as 
currency takes place without somebody suffering, the 
financiers and all those who handle money are in a posi- 



MONEY 195 

tion so to conduct their affairs as to profit by these changes. 
Meanwhile the rest of the community are in such a posi- 
tion that they have not the knowledge and even if they 
had the knowledge, would probably not have the ability, 
to do anything but lose by them. 

The average citizen has no knowledge on these sub- 
jects whatever, and is therefore at the mercy of financial 
heretics. He was misled by the greenback craze in the 
80's, by the silver craze in the 90's, and is subject to fur- 
ther delusions so long as coin remains the medium of 
exchange and coin is controlled by a few individuals 
whose only interest in it is to make out of it the largest 
fortune possible. 

It must not be imagined that an attempt has been made 
to furnish anything like an exhaustive account of the 
opportunities which financiers have for profiting at the 
expense of the public. To do so would require a volume 
as large as this one devoted entirely to this subject. 

For example, at this very time of writing, 1 the papers 
inform us that Mr. Morgan is hurrying back from Europe 
to settle the question whether a dividend is to be paid on 
the common stock of the United States Steel Company. 
It is known that Mr. Morgan received a very large block 
of this stock as his compensation for promoting the trust. 
If he still has enough of this stock to make the payment 
of a dividend of importance to him, or if he wants to sell 
at a high price, he will be naturally influenced by this 
motive to declare a dividend. If, on the other hand, he 
who best of all knows how prosperous the Company is, 
desires to purchase more of this stock at a low price, he 
will be tempted not to declare a dividend. The stock 
will fall and he will be able to make a large profit by 
purchasing. 

1 July 16, 1909. 



196 WHAT CAPITALISM IS 

In this manner directors are always able, if they choose, 
to make money on the declaration of doubtful dividends; 
and this can be done without its being possible to impute 
any blame to them, for a declaration of a dividend is 
always a matter of judgment. It is wise to put aside a 
certain part of the profits as a reserve to meet hard 
times, and just how much shall be put aside as a reserve 
and how much shall be paid out for dividends are matters 
on which it is very difficult for the best-intentioned men 
to agree. The directors, however, who control the com- 
pany can make up their minds beforehand whether they 
will declare a dividend or not. If they propose to pass 
a dividend, they can sell as much as the market permits 
and buy back later at reduced prices. If they decide 
to declare a dividend, they can buy as much as the 
market permits and sell later at advanced prices. 

Again, there seems to be no standard of morality 
amongst bankers as regards the profits they make. In 
the ordinary walks of life, a man is expected to be able 
to explain what the services are for which he receives any 
considerable sum of money. This, however, does not 
seem to be the case with bankers. In 1893, the United 
States Congress appointed a committee to investigate the 
rumor that over a million dollars had been remitted to 
J. P. Morgan & Company, Winslow Lanier & Company 
and J. & W. Seligman for the purpose of corrupting 
Congress. Messrs. Morgan, Lanier and Seligman were 
obliged to admit that a sum of $1,200,000 had been 
divided among them, "apparently for the use of their 
names and for nothing else." When asked if it had been 
remitted for the purpose of corrupting Congress, they 
denied it; when asked if they were still in possession of 
this sum, they admitted they were; when asked what the 
services were for which they had received this sum, they 



MONEY 197 

naively stated that they did not know. 1 Such an ad- 
mission made by a lawyer would be ground for having 
him disbarred. 

The very moral or immoral attitude that permits of 
bankers receiving enormous sums of money without being 
able to explain why these moneys were paid to them, 
pervades the whole financial atmosphere. 

The directors of our large corporations corrupt our 
legislatures; they endow universities and pervert our 
education; they support the churches and prevent them 
from preaching the doctrines of Christ; they determine 
elections so as to secure legislators whom they can 
control. They are masters, not only of our whole system 
of production and distribution, but of our government 
and our laws. And this democracy which in theory is a 
government of the people, by the people, and for the 
people, turns out to be a government of the people, by 
financiers, for financiers. 

Nor does it seem possible to put an end to this condi- 
tion of things so long as our system of production and 
distribution is competitive; for gold and silver have 
proved to be altogether the best mediums of exchange, 
and some medium of exchange we must have in order to 
carry on trade so long as that trade is left to individual 
initiative as at present. 

The whole community pays tribute to those who have 
gold and silver and those who handle it, and these last 
have a personal interest contrary to the interest of the 
public at moments of the greatest emergency. Com- 
petitive conditions have subjected the whole currency 
of the country to the control of a few men who thereby 
are masters of our commerce, our manufactures, our 
exports, our politics, our religion. In view of the fact 

1 House Reports, 52d Congress, 2d Session, v. 3, No. 2615, p. 5. 



198 WHAT CAPITALISM IS 

that this small group practically governs the country in 
matters of legislation, and by virtue of a sort of class 
solidarity between the judges and the possessing class, 
governs the courts also, the men who determine the 
making and executing of our laws should, in a democracy 
such as ours, be elected by the people. But they are not 
elected by the people and they are not removable by the 
people. They are irremovable usurpers; they are created 
by economic conditions and, as long as these economic 
conditions last, they will continue to enjoy the power 
they now exercise. 



CHAPTER VII 

CAN THE EVILS OF CAPITALISM BE ELIMINATED BY 

COOPERATION? 

One of our ablest captains of industry has lately 
collected articles and addresses on this subject in a book 
entitled, " Problems of the Day." If we were to eliminate 
from this book the errors under which Mr. Carnegie labors 
as to what Socialism is, we could make of it an admirable 
piece of Socialist propaganda. For Mr. Carnegie, al- 
though denouncing Socialism in every page, believes in 
giving the workingman an interest in the factory, and 
carries his belief in this system so far that he actually 
looks forward to the day when labor will reach "an 
equality with the millionaire as his partner in business." x 
He cites as an example of what could be done in this 
direction the Filene stores of Boston, the capital stock 
of which he says is held "exclusively by employees." 
Now this is exactly the system which modern Socialism 
wants to bring into existence. Because, therefore, Mr. 
Carnegie does not belong to the Platonic School of Social- 
ism which suggests the breaking-up of the home and is 
denounced by all practical Socialists of to-day; and be- 
cause he disapproves of the abolition of wealth, as do all 
practical Socialists of to-day, he deserves to occupy a 
front rank in our Socialist army for having put his finger 
upon the real evil — competition; and for having pointed 

1 "Problems of the Day/' by Andrew Carnegie, p. 76. 

199 



200 WHAT CAPITALISM IS 

the way to the real solution — the substitution of coopera- 
tion for competition all through our industrial system. 

One thing, however, Mr. Carnegie has failed to appre- 
ciate: namely, that when all our industries are organized, 
on the principle of the Filene stores — when, as Mr. Carnegie 
explains, the capital stock of every industry and depart- 
ment store is held exclusively by employees, the worker 
will not be the partner of the millionaire — he will have 
superseded him. I am afraid this is not what Mr. Car- 
negie wants, at least not in his day. But when he really 
wants this as much as in his book he seems to want it, 
Mr. Carnegie will be qualified to be a member of the 
Socialist party. 

There is an important distinction to be made between 
cooperation and cooperatives, because cooperatives may 
be divided into two very different classes: capitalistic 
cooperatives and socialistic cooperatives. 

The capitalistic cooperatives are either the efforts of 
capitalists to secure the fidelity of employees by giving 
them a minute share in the profits of the business, or the 
efforts of employees to benefit themselves by eliminating 
capitalists without eliminating capitalism; in other words, 
the fact that such cooperatives undertake to produce or 
distribute commodities under the competitive regime, 
converts them into capitalists. 

In marked contrast to these are the cooperative stores 
of Belgium, organized in part to improve the condition 
of those engaged in them, but also with the view of putting 
an end to capitalism altogether. These are performing 
a work of inestimable value to Socialism and the Socialist 
party in Belgium, while materially helping those who 
belong to them, they at the same time hold up as the 
standard aimed at, not the mere material improvement 
of themselves, but the ultimate triumph of an ideal. 



CAN EVILS OF CAPITALISM BE ELIMINATED? 201 

The field for cooperation is so vast that it cannot be 
traversed in the scope of this work. I shall close this 
subject therefore with the suggestion that all coopera- 
tives — even the capitalistic — are good and useful, for they 
tend to educate. It is true that they may also occasion 
evil; as for example, the Steel Trust when it encourages 
employees to purchase stock, while it discourages and 
destroys trade-union organization, and thereby creates 
an aristocracy of labor which tends to prevent the sense 
of solidarity in labor ranks that Marxians regard as 
essential to the triumph of the Socialist cause. 

But the evil it does is probably compensated by the 
good. Incidentally it furnishes us Socialists with a 
triumphant answer to Mr. Carnegie: Here in his city 
of Pittsburg which he built up with his genius, is the 
principle of cooperation adopted which he regards as 
the solution of all our ills; yet it is this very Pittsburg 
that to-day furnishes to the whole world the most abomi- 
nable picture of exploitation ever presented. 1 We Social- 
ists are indeed fortunate that this picture has been drawn 
not by ourselves, but by those who are to-day the most 
intelligently opposing us. 

1 The Pittsburg Survey, published by the Russell Sage Foundation. 



BOOK III 
WHAT SOCIALISM IS 



Socialism is too vast a subject to be brought within the 
four corners of any one definition. It is as impossible for 
a definition to convey an idea of Socialism as for an empty 
theater to convey the comedies, the idylls, and the trag- 
edies nightly enacted on its boards. A definition can 
at best barely give the mechanism of Socialism; it cannot 
furnish a picture of the effect of that mechanism in 
eliminating misery, in promoting progress, in making 
character. This must be painted on a canvas — and on 
a large canvas — and on many canvases — for, as has been 
already urged, Socialism is not a simple thing; it is a 
highly complex thing; and it is only when we have 
grasped all that Socialism will effect — when we have 
studied its economic results, its political results, its 
scientific results, and its ethical results — that we can 
appreciate this new Gospel of the Poor. 

Socialism not only derives strength from each of these 
results, it unites the divergencies between economics and 
politics, and solves the conflict between science and 
religion. So that these four great departments of human 
thought, instead of being independent or actually in 
conflict with one another, find themselves in Socialism 
united in one great harmonious whole. 

202 



WHAT SOCIALISM IS 203 

Just as Christianity derived its strength from the dis- 
content of the oppressed, so Socialism has pushed its first 
roots in the misery of the proletariat. But we do not 
judge of a flower exclusively from its roots. So must we 
not judge Socialism exclusively from that part of it which 
at present flourishes in dark tenements and in the misery 
of the unemployed. It is our fault that the tenements 
are dark, that the unemployed suffer. It will.be our 
fault if Socialism remains the Gospel of the Poor when we 
can make of it the final Gospel of the whole human race. 

For humanity has nearly finished the first great phase 
of its existence; it has played the role of the worm long 
enough; already is it cribbed, cabined, and confined by 
silk threads of its own weaving that for a hundred years 
the cocoon has been accumulating about it, repressing 
here, regulating there, till it is stifling under limitations 
created by itself. But the very pressure of these limita- 
tions has been developing new functions in us — a con- 
science restive under false standards, a capacity for wider 
sympathies — the wings of the grub, destined to burst the 
chrysalis of worn-out prejudices, regulations, legislations, 
and despotisms; to spread out into new spaces where 
there shall be development and happiness. 

Whether these hopes are well founded or not is the 
subject of our inquiry, beginning first with Economics — 
the roots of our flower; proceeding then to Politics — its 
stem; next to Science — its structure, and lastly to 
Morality and Religion — its blossom and its fruit. And 
if I group Morality and Religion, it is because these have 
both from the beginning of years and not always hand in 
hand, been groping after the same thing — Happiness. 



CHAPTER I 
THE ECONOMIC ASPECT OF SOCIALISM 

Let us begin by considering how large a part of our 
population is now devoting its entire time to the work of 
competition, as distinguished from that which is devoting 
its time to the task of production. 

It is obvious that all who are devoting their time to 
the work of competition would, in a cooperative common- 
wealth, be free to give their entire time to production; 
and the time they gave to production would be so much 
taken away from the time which those now engaged in 
production have to give to it. For example, the United 
States to-day keeps alive, according to the census of 
1900, over 76,000,000 men, women, and children; of these 
the working population is estimated at a little over 29,- 
000,000, of which, however, many are not engaged in 
production or distribution; as for example, actors, clergy- 
men, lawyers, soldiers; and although some others, such 
as journalists, physicians, and surgeons, are not occupied 
in production and distribution, they nevertheless are so 
necessary to every community that they may be regarded 
as a part of the working population. The percentage 
excluded, however, by excluding those not engaged in 
production and distribution, is so small that it is not 
worth while taking them into account; and for purposes 
of easy calculation we should, therefore, consider the 
whole population in round figures — 75,000,000, of which 

204 



THE ECONOMIC ASPECT OF SOCIALISM 205 

30,000,000 are engaged in production and distribution, 
the remaining 45,000,000 consisting of the aged, sick, 
women, and children who cannot work and in fact, all 
who by wealth or disability are deprived of the necessity 
of working. Now if, of the 30,000,000 who do the work 
of production, it is found that 15-,000,000, or one-half, are 
engaged in work that results from the competitive char- 
acter of our industrial system, it is clear that in a Socialist 
community in which there is no competition, these 
15,000,000 would be applied to the work of production; 
and therefore every man would have to work only one- 
half the number of hours he now works in order to keep 
the community alive. 

Let us see if we can form any idea how many are en- 
gaged in the wasteful work of competition, and how many, 
therefore, would in a Socialist society be set free to relieve 
the labor of those engaged in production. 

It is conoeded that of every one hundred men who start 
a new business ninety become insolvent. This means that 
for every ten fit and able to conduct a new business ninety 
engage in new business who are unable to earn their 
bread at it. In a cooperative commonwealth the exact 
number of men necessary to conduct business in any 
given place could be mathematically determined; and 
the ninety unsuccessful men who are now engaged in 
futile efforts to destroy the business of the ten successful 
men would be employed in production to their own 
advantage and to the relief of those already engaged 
therein. 

The wastefulness, however, of the present plan is not 
confined to the circumstance that many are engaged 
in attempting to do what can better be done by a few, 
but is increased by the fact that in the conflict between 
the successful and the unsuccessful a vast horde of men 



206 WHAT SOCIALISM IS 

are employed by competition, who would be thrown out 
of employment and therefore be serviceable for produc- 
tion in case competition were avoided. Amongst the 
men so employed are commercial travellers; these men 
occasion waste to the community, not only because in- 
stead of themselves producing they are living on the pro- 
duction of others, but because they constitute a large 
part of the passenger traffic of the country. The rail- 
roads are put to the expense of carrying these travellers 
all over the United States that they may each have an 
opportunity in every corner of the United States of de- 
crying the goods of one another. And this throws a 
side light on the evils of our present plan, for the railroads 
have an interest in encouraging this work. If they did not 
have this horde of commercial travellers to carry about 
the country, many of them might not be able to pay 
interest on their bonds. The testimony taken by the 
Industrial Commission furnishes admirable instances 
of the waste attending competitive production and the 
corresponding economy that would attend a Socialist 
system. Mr. Edson Bradley, President of the American 
Spirits Manufacturing Company, testifies that in the 
whisky business "somewhere between the distiller and 
the consumer in this country, $40,000,000 is lost. This 
goes primarily to the attempt to secure trade." x Now 
the whole capital invested in liquors and beverages is, 
according to the last census, $660,000,000, whereas the 
total manufactures amount to about $12,686,000,000. 
It will be seen, therefore, that the capital invested 
in liquors and beverages is about one-twentieth of 
that invested in other manufactures. If, therefore, 
$40,000,000 are lost in getting the trade in the liquor 
business, it may be inferred that twenty times this amount 

1 Report of the Industrial Commission, Vol. I, p. 829. 



THE ECONOMIC ASPECT OF SOCIALISM 207 

— that is to say, $800,000,000 — are lost in getting the 
trade by all the manufactures in the country. This 
represents only the expense of advertising in manu- 
factures; it does not cover the advertising done by the 
whole retail trade, the department stores, insurance 
companies — life insurance, fire insurance, title insurance — 
real estate agents, quack medicines, and that vast body 
of population known as middlemen, who raise the price 
of commodities to the consumer and whose services would 
be eliminated in a cooperative commonwealth. 

This latter class of advertising is very much larger than 
that of the manufacturer, because it is the peculiar 
function of the retailer to sell — to get the market — and 
the burden of advertising falls heavier upon him. If 
$800,000,000 therefore represents the cost to the manu- 
facturer of getting the market, it is probable that the 
total oost of getting the market by the whole community 
does not fall short of twice this sum. 

The advertiser practically pays the whole cost of printing 
and publishing the innumerable newspapers and magazines 
of this country. The one cent paid for such a paper as the 
American does not cover the cost of the paper alone; it is 
the advertisements that pay handsomely for all the rest. 

Advertising would be unnecessary in a cooperative 
system, where practically everything would be furnished 
by a single industry. As the Reverend E. Ellis Carr 
says, 1 the United States Government does not find it 
necessary to advertise postage stamps. The Standard 
Oil no longer advertises oil. Those of us who are old 
enough remember how, prior to the organization of the 
oil trust, our fences were placarded by the rival claims of 
a dozen different oils: Pratt's Astral oil, etc., in letters 
of huge and ungainly size. 

1 Christian Socialist. 



208 WHAT SOCIALISM IS 

The only advertising necessary would be that of private 
enterprises started in such industries as did not give 
satisfaction to the public, and these, it is to be hoped, 
would be relatively small. 

Mr. Dowe, President of the Commercial Travellers' 
National League, testified 1 that " 35,000 salesmen had 
been thrown out of employment by the organization of 
trusts and 25,000 reduced to two-thirds of their previous 
salaries. . . . The Baking Powder Trust has replaced men 
at $4000 to $5000 a year by others at $18 a week. . . . 
The displacement of travelling men represents also large 
loss to railways, amounting, on the estimate that each 
traveller spends $2.50 a day for 240 days, to $27,000,000, 
while the loss to hotels would be at least as much as to 
railways." Adding up these losses, we reach the fol- 
lowing result : 

35,000 salesmen at an average compensation (in- 
cluding commissions) of $3000 each a year . . . $105,000,000 

Loss in railroad travelling 27,000,000 

Loss in hotel expenses 27,000,000 

Together $159,000,000 

In the few industries, therefore, in which competition 
has been diminished by the trust system, an economy of 
$159,000,000 was estimated to have been already effected 
in the employment of salesmen alone. And this was ten 
years ago. These figures enable us to appreciate the 
enormous economy that would result from an elimination 
of competition from our industries. An economy that 
constitutes a loss to commercial travellers, railroads, and 
hotels under the competitive system would constitute a 
pure gain to a Socialist community; for it would mean so 

1 Report of the Industrial Commission, Vol. I, Part I, p. 222. 



THE ECONOMIC ASPECT OF SOCIALISM 209 

much more labor for production. Our present system 
then encourages useless expenditure, whereas Socialism 
would eliminate it. 

Another important economy would be made in the 
running of public enterprises, through the absence of the 
necessity of collecting revenue therefrom. In municipal 
tramways, for example, one-half the force could be dis- 
pensed with, for the functions of the conductor are 
practically confined to collecting fares. A similar econ- 
omy would be practised on railroads; in telegrams; no 
stamps would be required for postage; no costly corps 
of clerks for bookkeeping. 

Under our system gas is furnished to our cities by gas 
companies, each one of which tears up the streets at great 
detriment to public convenience and health, to lay its 
mains for the mere purpose of competing with existing 
companies, with the result of forcing a consolidation which 
tends to make gas dearer instead of cheaper to the con- 
sumer. Professor Ely estimates x that the consolidation 
of gas companies in Baltimore has cost eighteen millions, 
of which ten millions represent pure loss. 

Much the same thing is true of railroads. Professor 
Ely quotes a railroad manager who states that if the rail- 
ways of the United States were managed as a unit instead 
of by competing companies, such management would 
effect an economy of two hundred million dollars a year; 
he cites, as an instance of useless paralleling of roads, the 
numerous railroads which connect New York with Chi- 
cago. He estimates that these lines cost two hundred 
million dollars, and that the maintenance of the useless 
lines involves perpetual loss. To-day, when railroads have 
doubled in length and traffic, the possible economy may 
well be estimated at twice this amount. He is obliged, 

1 "Socialism and Social Reform," p. 121. 



210 WHAT SOCIALISM IS 

however, to admit that the paralleling of railroads results 
in considerable accommodation, when parallel lines pass 
through different places and occasion some advantage in 
the time-table. With many lines in the United States - 
this, however, is not the case. The Colorado Midland 
parallels the Denver and Rio Grande, passing through vir- 
tually the same places, and as both are subjected to the 
necessity of connecting and forwarding passengers to lines 
at their extremities, both are obliged to run trains at the 
same hours. There is in this case no advantage either 
to the time-table or to new places. 

Nor does the competition of parallel roads always 
furnish better accommodation to the public. Between 
Chicago and Denver one line is able easily to run trains 
from place to place in twenty-four hours; but for the 
purpose of avoiding a freight war with competing lines, 
it has entered into an arrangement with them under 
which it agrees not to run passenger trains in less than 
thirty-six hours. The public, therefore, instead of gain- 
ing, loses an advantage of twelve hours, thereby learning 
at no small inconvenience that competition does not 
always compete. 

What is true of the railroads and gas companies is also 
true of telegraph business. The Western Union was 
capitalized at one hundred million dollars. It is estimated 
that the cost of laying the lines actually used by the 
Western Union was not more than twenty millions; 
eighty million dollars, therefore, have been wasted by 
the existing system, which encourages private companies 
to construct lines with the result of compelling other 
companies to buy them up. Professor Ely adds that 
"it cost England nearly as much to make the telegraph a 
part of the postoffice as it did all the other countries of 
Europe put together, because in these the telegraph has 



THE ECONOMIC ASPECT OF SOCIALISM 211 

been from the beginning a part of the postoffice, and the 
wastes of competition had been avoided." 1 

Another most wasteful feature attending our present 
system is the expense of distributing goods; for example, 
the articles which enter most into our daily life, milk, 
bread, butter, eggs, meat, fish, and vegetables. Compare 
the method of distributing these things with that for 
distributing letters adopted by the postoffice. The fact 
that the government is the only instrumentality through 
which letters are distributed permits it to effect economy 
in time, labor, and expense by sorting the letters before- 
hand according to streets and confining the distribution 
in any one street to a single carrier, who distributes the 
letters door by door. 

This is the economical system for distributing all things 
in regular use that would be adopted by the Socialist 
plan. Compare this now with the plan necessitated by 
the competitive system. Every block is served with milk 
by a number of milk dealers instead of by one; 2 every 
block is furnished with bread by a very large number of 
dealers instead of by one; every block is furnished with 
meat by a very large number of dealers instead of by one; 
and so on through every article which enters into our 
daily use. 

Not only is there great waste of labor in the business of 
producing and distributing the necessaries of life under 
the competitive system, but the system itself creates a 

1 "Socialism and Social Reform," p. 120. 

2 It is stated that the retailing of milk in New York is practically 
confined to six companies. But the price of milk has not been 
reduced accordingly. The economies resulting from this combina- 
tion have swelled the profits of these companies. The consumers 
gain nothing from it. And this is what is taking place with all 
trust articles, 



212 WHAT SOCIALISM IS 

large class of business that absorbs much of the wealth of 
the community and employs a very large number of its 
members. For example, under a socialist system there 
would no longer be any necessity or advantage in insur- 
ance, whether against death or fire, or accident, or hail, 
or defective title, or any other danger. The reason of 
this is obvious: we insure against pecuniary loss arising 
out of these accidents because otherwise the whole loss 
will fall upon ourselves. In a Socialist society some of 
these occasions for loss would not exist at all, and those 
that did exist would fall upon the entire people and would 
consequently be inappreciable by any one member of it. 
For example, a man insures his life so that his children will 
not be reduced to poverty by his death; but in the Socialist 
society the widow and the child are provided for, being 
all of them members and all sharers in its income. Death 
in such a case would practically not constitute a loss to 
the state financially, because the number of deaths of the 
very old and the very young — the unproductive members 
of the community — is far greater than that of its produc- 
tive members. 

Insurance companies are beginning to understand the 
importance of keeping their policy holders in good health. 
The Metropolitan Life Insurance Company is to-day main- 
taining nurses for this purpose. 

Another business that would be eliminated in a Socialist 
state is the entire business done by brokers; not only 
Wall Street brokers, but real estate brokers, mining 
brokers, and brokers of every description, in so far as they 
are engaged in competition. The abolition of Wall 
Street would carry with it the abolition of gambling in 
stocks which is a necessary feature thereof. No law has 
yet been devised, though the attempt has often been 
made, that would, so long as the competitive system 



THE ECONOMIC ASPECT OF SOCIALISM 213 

endures, put a stop to gambling in stocks. A law which 
would successfully stop gambling in stocks would stop 
legitimate dealing in stocks also. But the immoral ele- 
ment involved in "puts" and "calls" is only an exaggera- 
tion of the immoral element involved in all industrial 
transactions built upon the principle of private profit. 
For although business can be conducted in such a way 
as only to furnish to those engaged in it a fair remunera- 
tion, it perpetually furnishes a temptation to contrive so 
that it shall furnish a large rather than a fair return. 
In fact, the whole struggle of business consists in endeav- 
oring to secure the largest return of profit for the least 
expenditure of labor. The man who succeeds in getting 
the largest return for the least expenditure is the successful 
business man; and no man does this with more security 
than the next class to which attention may be called, 
whose occupation would come to an end in the Socialist 
state; namely, the bankers. 

It would take too long to enter here into an accurate 
and fair estimate of the service rendered by the banker 
and the reward he obtains for it. Most writers who favor 
Socialism undervalue the functions of the banker. They 
are so impressed by the enormous incomes which bankers 
make that they do not appreciate the great services they 
render; and although, in a Socialist state, the banker 
qua banker would tend to disappear, the man who to-day 
does the work of a banker would, it is hoped, do the same 
work for the state. So that although the business of 
banking would disappear, the best form of government 
would be that in which individuals who have been dis- 
covered to be best fitted for the onerous and difficult 
duties of finance would be those to whom these duties 
would be intrusted. Whether the man best fitted to do 
this difficult work would be intrusted with it under the 



214 WHAT SOCIALISM IS 

Socialist plan is a doubt raised as an objection to Socialism 
which will be considered later. 1 

Another large class of intelligent men, now engaged 
in carrying on the quarrels which result from the competi- 
tive system, would be left without an occupation under 
the Socialist plan; namely, the lawyers. With them, the 
hatred and vindictiveness which arise from litigation 
would in a Socialist society, in great part, disappear also. 
For lawyers constitute the class whose business it is to 
conduct these quarrels, and, alas! also to inflame them. 
When we consider that in New York city alone there are 
nearly ten thousand practising lawyers, and add to these 
the clerks, stenographers, bookkeepers, and office-boys 
employed by each of them, those employed in the courts, 
the sheriff's office, the county clerk's office, marshals, 
deputy sheriffs, and others; and take into account that 
most of these men are engaged in fighting, we cannot but 
be struck by the enormous advantage to the community 
of a system which would practically eliminate this class 
altogether. 

I must not be understood to mean, however, that there 
would be no necessity for courts under the Socialist plan. 
Even though crimes against property were eliminated by 
Socialism, there would still be a temptation to commit 
crime, owing to sexual jealousy and in a certain degree 
to intemperance and idleness. It cannot be doubted 
that intemperance and idleness would tend to diminish 
with the disappearance of the misery that reduces men 
to the physical condition that engenders these vices, but 
there would still, doubtless, be some intemperance and 
some idleness; there would certainly remain unhappy 
marriages; and as every man is to remain possessed of a 
small amount of property there would be minute questions 

1 Book III, Chapter III, 



THE ECONOMIC ASPECT OF SOCIALISM 215 

of property sometimes involved. But it is hardly con- 
ceivable that such questions could involve any system 
of justice more elaborate than that of the justice of the 
peace, and possibly a single court of appeal. The diminu- 
tion of competition would so simplify the law that no 
question would be likely to arise that the parties to the 
litigation could not themselves explain. How little 
litigation would be likely under a Socialist regime may be 
judged by comparing the litigation to which the adminis- 
tration of the postoffice gives rise with the interminable 
lawsuits which result from the administration of rail- 
roads. 1 Moreover, it is to be hoped that a Socialist 
community would at last have leisure to study criminology 
and to understand that the criminal has to be treated as 
a sick man rather than a wicked one. The whole system 
of criminal procedure would be changed, and the type 
now known as the criminal lawyer would disappear. 
The existing system, under which every prosecuting 
officer considers his reputation involved in securing the 
punishment of every accused person brought before the 
court, 2 necessarily gives rise to a corresponding class of 
lawyer who regards his reputation as well as his fee in- 
volved in opposing the efforts of the prosecuting officer 
by any means, however unjustifiable. Of course, to 
the extent to which the competitive system was left 
standing, there would have to be lawyers to protect com- 
petitive interests. But these lawyers would be sup- 
ported by the competitive system. 

If, now, we consider that the large number of men 

1 This is more true of railroads in the United States than in 
England, probably because competing roads have not been tolerated 
in England to the same extent as in our country. 

3 The Thaw case furnishes an unfortunate illustration of this 
tendency. 



216 WHAT SOCIALISM IS 

liberated by the substitution of Socialism for our present 
form of government would not only diminish the labor 
of those now engaged in production, but that it con- 
stitutes the part of our population engaged in fanning the 
flame of hatred in the minds of men, the advantage to a 
community of having this perpetual source of trouble 
removed will be obvious. But we are not concerned so 
much now with the reduction of hatred under the Socialist 
plan as with its economy. 

Let us next pass to the consideration of the waste- 
fulness involved in the field of production itself: 

In 1894 horses in the West became so valueless that they 
were left unbranded by their owners, lest the branding 
of them involve the payment of taxes thereupon. Cattle, 
on the other hand, have of late risen in value; the price 
of them fell so low some time ago as to involve the ruin 
of all those largely engaged in raising them; but to-day 
everyone is rushing back into this business. This state 
of things furnishes a fair opportunity of judging how im- 
perfectly informed the producer is as to the needs of the 
community. He is only informed that the community is 
overstocked with an article by being ruined in the course of 
producing it. This plan is not only productive of misery 
to a large number of individuals in every community, 
but is necessarily an extremely wasteful one. The object 
of every community ought to be to produce the things 
it needs, not the things it does not need. The present 
system, on the contrary, obliges the community to be 
continually producing the things it does not need as the 
only means by which it can arrive at a knowledge of what 
it does need. 

For under the existing system, overproduction occa- 
sions a surplusage of things in themselves valuable, but 
the exchange value of which has been diminished by 



THE ECONOMIC ASPECT OF SOCIALISM 217 

their abundance. And the producer cannot afford to 
keep this surplusage, because he has fixed charges to pay. 
He has to sell his crop at a loss because he must have 
money to pay rent, or interest on mortgage, or salaries, 
or for his own support during the year. It is this pressure 
he is under to sell which impoverishes him. And its 
consequences are far-reaching; for as the price of raw 
cotton goes down, cotton manufacturers are encouraged 
to buy, and to increase the output of their factories; and 
so overproduction of raw material tends to result in over- 
production of manufactured goods. 

In a Socialist society the industry or good harvest of 
one year would have for effect a diminution of labor the 
next; or greater comfort or luxury next year for the 
same labor; no man's labor would be lost, and the boun- 
tifulness of Nature would be a blessing and not, as now, 
a misfortune. 

The efforts to prevent the overproduction of cotton 
in the South gave rise to a convention in 1892, regarding 
which Professor Ely quotes a telegram from Memphis, 
January 8, as follows: 

" That the farmers of the South are in earnest in their 
endeavors to solve the serious problems of overproduc- 
tion of cotton is evinced by the enthusiastic meeting of 
delegates to the convention of the Mississippi Valley 
Cotton Growers 7 Association, which was called to order 
in this city this morning." x 

And again the speech of the President of the Boston 
Chamber of Commerce: 

"In 1890 we harvested a cotton crop of over eight 
million bales — several hundred thousand bales more than 
the world could consume. Had the crops of the present 
year been equally large, it would have been an appalling 

1 Ely, "Socialism and Social Reform/' p. 134. 



218 WHAT SOCIALISM IS 

calamity to the section of our country that devotes so 
large a portion of its labor and capital to the raising of 
cotton/' i 

Nothing could better illustrate the evil of our present 
system and the benefits of Socialism than such a state 
of things as is described in the speech already quoted 
from the President of the Boston Chamber of Commerce. 2 
If in a Socialist Society more bales of cotton were pro- 
duced in any given year than the community or the 
world could consume, the community would store away 
the unused cotton and modify its agriculture in a manner 
to bring the cotton crop into proper relation to existing 
needs. But such an event could not be an "appalling 
calamity"; it could not be anything but a benefit; so 
much more wealth for the community; so much less 
labor for its citizens. And what is true of the cotton 
crop is equally true of all other crops. Overproduction 
is impossible in a cooperative community, for all the 
overproduction of one year would mean less work in 
that particular kind of production the next. Every 
citizen in the community would profit by so-called over- 
production instead of, as now, suffering from it. 

Overproduction is closely allied to invention, which, 
as is well known, has been a source of despair to working- 
men; for improvements in machinery almost always 
throw large numbers of them out of employment. In 
India, as has been described, the destruction of hand- 
loom weavers by machinery brought about a .misery 
hardly paralleled in the history of war; "the bones of the 
cotton-weavers are bleaching on the plains of India." 

1 Ely, " Socialism and Social Reform/' p. 134. 

2 Book II, Chapter I. This subject has been discussed in detail 
in " Government or Human Evolution," Book II, Chapter II, p. 
273, et seq., by the author. 



THE ECONOMIC ASPECT OF SOCIALISM 219 

Yet invention, far from bringing distress to the working- 
men, as under our system it must, would in a cooperative 
commonwealth prove an unqualified advantage. For 
every invention, that increases the efficiency of human 
labor diminishes the amount of time that must be spent 
in labor to obtain the same result. In a cooperative 
state the saving of labor is a benefit to every individual 
in the community, whereas under the competitive system 
th.e saving of labor is of immediate benefit to the owner 
of the patent alone, and means immediate distress to the 
laborers it particularly affects. 

A standard objection to Socialism is that it would 
remove all stimulus to invention. This I believe to be 
a profound mistake. 

In the first place, inventors are not always urged to 
invention by the prospect of financial reward. The great 
discoveries of humanity, at the basis of all our practical 
advances, were made by men who neither sought nor 
obtained a reward therefor. It was not with the view 
of making money that Newton discovered and pro- 
pounded the laws of gravity, or Ohm the laws of electrical 
Resistance. Nor do inventors to-day reap the reward of 
their inventions. Capitalists often have an interest in 
suppressing inventions;* for inventions generally involve 
the expensive transformation of existing plants. For 
example, Mr. Babbage l describes how a patent for 
welding gun-barrels by machinery had long been unused 
because of the cheapness of hand labor'; but as soon as a 
strike forced up wages recourse was had to the patent, 
which until then had been neglected. 

Capitalists often prefer to dispense with an improve- 
ment rather than go to the expense which improvements 
generally occasion. This was the unwritten motive for 

1 "Economy of Manufacture." Babbage (London, 1832), p. 246. 



220 WHAT SOCIALISM IS 

the opposition of England to the construction of the Suez 
Canal, and was believed by M. DeLesseps to be the motive 
of their opposition to the Panama Canal. 1 Again, no 
one who has had personal acquaintance with inventors_ 
can believe that their discoveries are to any material 
extent the result of financial motive. It would be 
difficult to imagine the conditions under which Edison 
and Maxim would not invent. They cannot help in- 
venting; they are as much under a necessity to invent 
as a hen to lay eggs. Undoubtedly there are certain 
environments which favor the production and utilization 
of inventing types, and others that disfavor the pro- 
duction and utilization of such types. And undoubtedly 
a motive for invention is a part of the environment which 
does contribute to invention; but would such a motive 
be wanting in a Socialist society? I think it can be shown 
that it would not only be present, but would be a stronger 
motive in the Socialist society than in our own; for 
under our own the reward which an inventor receives for 
an invention is a patent, and a patent is, as all lawyers 
will testify, merely a subject for litigation. In other 
words, every man who invents a useful thing has to over- 
come the objections of the patent office; the objections 
of infringers; the objections of owners of machines which 
would be superseded, all three obstacles of no small 
order. And not until they are all overcome, if indeed, 
they are, is the patent likely to be a source of income to 
the inventor. Under the Socialist order, however, every 
man is interested in increasing the productiveness of 
society to diminish the hours of labor; and nothing, 

1 M. DeLesseps has stated that it cost England £100,000,000 to 
change its shipping so as to fit it for passage through the Suez 
Canal, and this expense applies more or less to change of machinery 
due to invention in every factory. 



THE ECONOMIC ASPECT OF SOCIALISM 221 

moreover, would be easier than for a Socialist Society 
exceptionally to reward invention by diminishing the 
hours of labor due to it by the inventor. 

If an inventor by any one invention shortened the hours 
of labor in an aggregate amount equivalent to a lifetime 
of his own work for the community, he ought to be re- 
lieved of the necessity of himself doing further work. 
If the invention were clearly due to inventive skill and 
not to accident, it would be to the interest of the industry 
in which he was engaged to furnish him with a laboratory 
where he could experiment with a view to further in- 
vention, as the General Electric Company does for its 
inventors and Mr. Westinghouse for his. There is not 
one inventor in a hundred but would laboriously avail 
of such an opportunity; for the delight of an inventor 
is to invent. So inventors would constitute one of the 
Honor group of the community. They would receive 
during their lives the consideration due to their inven- 
tiveness and industry. At present the enormous ma- 
jority of inventors die poor and unknown. Of all the 
inventors in America only three that I know of are rich, 
Westinghouse, Bell, and Edison. Practically all the rest 
have been victims of their own inventive faculty. Who 
knows the name of the inventor of the slot machine so 
much in vogue to-day? His name was Percival Everitt, 
and he died a pauper in the street. 

But we need not have recourse to argument to demon- 
strate that pecuniary reward is not necessary to stimulate 
invention. There is one profession in which a germ of 
self-respect has established the rule that no discovery 
or invention shall receive pecuniary reward — the medical 
profession. No doctor who wants to keep or earn a 
standing patents a medicine or surgical instrument. 
Those who do so are at once ostracized. Medicine or 



222 WHAT SOCIALISM IS 

surgical inventions are deemed by self-respecting doctors 
too important to the community for the inventor to 
limit their use by patent. 

If this idea of social service to-day animates the medical 
profession, why should it not ultimately animate other 
professions, other industries, other occupations? Why 
should it not animate them all? 

Another profession has furnished the elements for all 
invention and has never asked a pecuniary reward — I 
mean the teachers. If, for example, we take such a sub- 
ject as electricity, it will be found that all the fundamental 
discoveries that enable the modern use of electricity are 
due entirely to the researches of men who, out of sheer 
love of the work, added research to the occupations for 
which they were paid. Sir Isaac Newton was the first 
to discover the use of glass as a non-conductor of electricity. 
Galvani and Volta, who gave their names — one to 
Galvanic, and the other to Voltaic electricity — were 
professors in Italy. The action of the electric current 
on a compass needle was discovered by Professor H. O. 
Oersted in Copenhagen; and the nature of electro- 
motive force, current strength and resistance, were 
determined by Professor G. S. Ohm in Holland. But 
the greatest discoveries of all were made by Faraday, who 
refused a title in order to remain a professor all the days 
of his life. Is it possible that with the record of these 
men before us, we can maintain the theory that gain is 
the only stimulus to invention? If we think a little, we 
shall see how essentially childish this notion is. 

There are three principal motives for invention: 

The desire to make money is one, but my experience 
of inventors has persuaded me that it is the least, and is 
only perceptible in inventors of the smallest caliber. 

The faculty of invention is itself the determining 



THE ECONOMIC ASPECT OF SOCIALISM 223 

motive. A man who has a faculty must exercise that 
faculty or suffer. The artist must paint; the sculptor 
must sculpt; the musician must make music; the poet 
must make rhymes. Lowell said that when he had no 
time to state a proposition carefully in prose, he stated 
it in rhyme. 

No one who has worked with inventors would be guilty 
of the error that inventors need the stimulus of money 
reward. The mind of the inventor teems with inventions 
as a herring at spawning season teems with spawn. And 
as the herring must relieve herself of her spawn so must 
the inventor relieve himself of his inventions. One great 
inventor of the present day was in 1883 so fertile that the 
company who had secured his exclusive services paid 
him to go to Europe and stop inventing in order to avoid 
the ruinous expense of taking out his patents. The in- 
ventor is driven by two forces: a function that insists 
upon being exercised, and the pleasure which this exer- 
cise occasions. Every man who can do a thing well loves 
doing that thing. To-day when athletics bring notoriety 
it is very natural to conclude that men row to get this 
notoriety. But in the old days when there was little 
or no notoriety, men who could row, rowed for the pleasure 
of it; men who could box, boxed for the pleasure of it, 
So to-day because a few inventors — a very few — have 
become wealthy, the conclusion is drawn that inventors 
invent only to make money. It is a pardonable fallacy, 
but one that it takes very little intellectual effort to 
explode. 

A man gifted with curiosity and imagination will 
forget altogether the needs of the body in his effort to 
attain his end. Inventors are notoriously improvident. 
Bernard Palissy not only forgot to eat, but to furnish food 
to his wife and children. Nay, he not only starved him- 



224 WHAT SOCIALISM IS 

self and them, but burned his furniture to the last chair 
in his desperate efforts to get the glaze he was in search 
of. A chemist will forget mealtime and bedtime in his 
laboratory. There is no force in the world more com-- 
pelling than the force of an idea; none to which the body- 
is under a more complete subjection. An inventor in 
pursuit of a solution needs no more stimulus than a stag 
in the rutting season in pursuit of his doe. The theory 
that he does, and that it is the stimulus of money that he 
needs, is that of the amateur who has never seen an in- 
ventor at work, or of the bookkeeper who reduces every- 
thing — body, mind, soul, and heart — to dollars and cents. 

An inventor may have been compelled to abandon 
research by the necessity of making money or by the 
difficulty of finding it. Many an one has been crushed 
by just such difficulties as these; and indeed it may 
justly be said that more inventions are lost to us by the 
money difficulty than are secured to us by the stimulus 
of a money reward. 

A third motive is the desire for consideration which 
is at the bottom of many other desires — at the bottom 
even of the desire for money itself. For if we analyze 
the desire for money we shall perceive that it includes 
two very different motives: the motive of prudence — 
the desire to secure the comforts and luxuries of life; and 
the motive of ambition, or the desire for the consideration 
of others. Now the former is the first in time, for a man 
must begin by securing the material things of life. But 
once these are secured the motive that keeps men making 
money is desire for consideration. And this desire, 
though evil when excessive, is in moderation one of the 
greatest of human virtues; for it sets men upon deserving 
the affection of their neighbors and promotes unselfish- 
ness and self-sacrifice. One of the curses of the competi- 



THE ECONOMIC ASPECT OF SOCIALISM 225 

tive system is that the desire for consideration, which 
in its essence is a virtue, is converted by our money sys- 
tem into a vice, because money is the chief instrument 
in securing consideration. 1 More will have to be said 
on this subject later. Here we may content ourselves 
with noting that in a Socialist society consideration will 
be secured not meretriciously through money, but de- 
servedly through service. The inventor who shortens 
hours of labor for the community will belong to the 
Honor Roll. He will secure this recognition not after 
having forced his invention on the capitalist and fought 
its merits through the courts, created unemployment 
for his fellows, and crushed competition out of the field 
his patent covers — but directly from the industry he has 
benefited, without the waste that attends the establishing 
of patent rights to-day. The inventor under Socialism 
w r ill have a stronger stimulus than he has to-day; for the 
chances of securing livelihood and consideration are 
certainly not more than one in a hundred, whereas under 
Socialism they will be a hundred to one. There will not 
be the opposition of invested capital to overcome; nor 
the hostility of his fellow-workman; nor the villainy of 
the infringer. If his invention can reduce the hours of 
labor or otherwise benefit the community, it will be hailed 
with delight and honor. And so even though he need no 
stimulus he will under Socialism have it; for his reward 
will be prompt and secure. 

Moreover, as Professor Ely has pointed out, the ten- 
dency of invention in a Socialist state would be to replace 
work which now involves drudgery by machinery that 
would tend to lessen or eliminate it. 

If it were conceivable that a law could be made or 
enforced requiring that millionaires, and none but million- 

1 Book III, Chapter II. 



226 WHAT SOCIALISM IS 

aires, were to serve as stokers, there is no doubt that all 
the ingenuity in the larid would at once be put to making 
the work of stoking less detestable than it now is; if 
necessary, naval architecture would be so reformed from- 
top to bottom, as to .reduce the work of stoking to that 
pressure of a finger upon a button which is the only 
physical work imposed by modern conditions upon the 
millionaire to-day. 

The improvements due to invention would in a Socialist 
society differ, perhaps, in character but not in quantity, 
for invention obeys the particular stimulus which gives 
rise to it. Thus Karl Marx points out 1 that mechanical 
traction was not introduced into mines until a law for- 
bade the use of women and children there, and the " half- 
time system stimulated the invention of the piecing- 
machine," thereby replacing child labor in woolen-yarn 
manufacture. Again, immense improvements have been 
made in charging and drawing gas retorts, owing to labor 
troubles, and there is no doubt that all arduous work 
would soon be made less arduous if we all had to take a 
turn at it. 

The objection that Socialism would destroy the stim- 
ulus to .invention has been treated at what may seem 
disproportionate length on account of its extreme im- 
portance. For it is owing to human inventiveness that 
production to-day tends to outstrip consumption. Of 
all the speculations upon the possible advantages of .a 
new social order those which concern themselves with the 
shortening of the average working day are the most 
fascinating, yet the most dangerous. They are fascinat- 
ing because, of the many afflictions of the present order 
it is the excessive workday that we feel most, for it is 
that which robs so many of us or our meed of personal 

1 "Capital," Part IV, Chapter XV. 



THE ECONOMIC ASPECT OF SOCIALISM 227 

life; and we know that any reduction of the hours of 
labor would mean an immediate increase in the quantity, 
and an ultimate increase in the quality, of our life. But 
they are dangerous speculations because they probe to 
the very heart of that wonderfully complicated economic 
process which we call Capitalism. To make any scientific 
estimate of the social labor time required to produce the 
commodities socially necessary for our health and happi- 
ness would require an elaborate and intimate investiga- 
tion of the most secret details of industry, trade, and 
transportation, such as there is little likelihood of ever 
being made. Nevertheless, it is possible, in the light of 
some data already at our command, to get a suggestive 
glimpse into the probabilities of the situation. 

The 13th Annual Report of the Bureau of Labor is an 
exhaustive study of the actual time required to produce 
some 600 different commodities, ranging all the way from 
apple trees to loaves of bread and shingles. The principal 
object of this Report was to compare the cost of pro- 
duction by hand with the cost of production by machine; 
and it has demonstrated the enormous progress that has 
been made in the art of production by the substitution 
of machine for hand labor. For example, before the 
introduction of machine labor it took about sixty-three 
hours and a half to produce thirty bushels of barley; 
whereas to-day, with the use of machinery, the same 
amount can be produced in two hours and forty-two 
minutes (p. 24-5). The Report, in estimating the cost 
of producing, includes breaking the ground, sowing and 
covering seed and pulverzing topsoil, hauling water and 
fuel for engine, reaping, threshing, measuring, sacking 
and hauling to the granary (p. 432-3). 

Having these figures it would seem to be a very simple 
matter to ascertain the total time required to produce 



228 WHAT SOCIALISM IS 

the various commodities consumed by the average work- 
ingman's family. It would seem as though all we had to 
do was to make out a list of these commodities, get the 
time cost of each from the Report and add these together^ 
to get the total. Unfortunately, however, the Report 
does not cover all the items which would have to be in- 
cluded in this list of necessaries; and to make an esti- 
mate from a single commodity or from two or three 
commodities would be a little dangerous, because some 
of the commodities have much higher time values than 
others and would therefore introduce many elements 
of uncertainty. 

But we may approach the question from another stand- 
point. The Report does furnish the time value of ten 
of the principal crops and of bituminous coal. Let us, 
then, restate the problem in the following form: 

Assuming social ownership of land (including bituminous 
coal lands) and modern machinery, how many hours' labor 
per day would be required to produce enough of the principal 
crops to sell at farm or mine for a sum sufficient to buy the 
necessaries of existence for the average family ? 

The first step, obviously, is to determine what consti- 
tutes the necessaries of existence for the average American 
family. Here again we may resort to official statistics. 
In the year 1900-01 the U. S. Bureau of Labor entered 
upon an investigation of the income and expenditure of 
the average American family. Agents were sent out all 
over the country to collect data at first hand. These 
agents got reports from some 25,440 families, and the 
figures are tabulated and summarized in the 18th Annual 
Report of this Bureau. 1 

These 25,000 families had the necessaries of existence, 

1 Issued by the Government Printing Office in 1904, entitled. 
"Cost of Living and Retail Prices of Food." 



THE ECONOMIC ASPECT OF SOCIALISM 229 

we know, simply because they managed to live, survive, 
and reproduce. Their average income was $749.50; their 
average expenditure, $699.24, thus representing a saving 
of $50 a year. But many of these families had boarders, 
many had grown-up children or wife at work, many had 
lodgers, so that the income was artificially increased or 
diminished by these factors. There were, however, 
11,156 families among these which the report designates 
as "norma!"; these were distinguished by the following 
characteristics: a husband at work; a wife at home; not 
more than five children — none over 14 years of age; no 
dependents, boarders, lodgers, or servants (p. 18). Good 
units, you see, from a statistical standpoint. Now, the 
average income of these normal families was $650.98; 
the average expediture $617.80. 1 

Here, then, we have over 10,000 families, of five persons 
each, who manage to live on $617.80 a year, without 
resorting to crime or charity. That they live in straitened 
conditions is undoubtedly true, but they are by no means 
submerged, for in their cooperation with the agents of the 
Bureau of Labor they all displayed qualities of intelligence 
which are not to be found among the submerged. In 
short, they were average self-respecting American work- 
ingmen's families. 

But let us assume that $617.80 is inadequate; let us 
provide a margin of safety by allowing $800 as the mini- 
mum for procuring the necessaries of existence. 2 Below 
is a table showing time cost per unit (bushels or pounds) 
of ten principal crops and of bituminous coal. This is 

lu Cost of Living and Retail Prices of Food/' pp. 18, 90-102, 
516-93. 

2 "The Standard of Living Among Workingmen's Families in 
New York City," by Robert Coit Chap in, Ph.B., Charities Publica- 
tion Committee, 1909, p. 178, et seq. 



230 



WHAT SOCIALISM IS 



derived from the tables on pages 24-25 of the 13th 
Annual Report of the Bureau of Labor, which are 
assumed to be accurate. 



Commodity. 



Quantity. 



Time Cost. 








Unit. 


Hrs. 


Min. 


2 


42.8 


1 bush. 


6 


17.4 


I " 


15 


30.5 


1 ton 


7 


5.8 


1 bush. 


17 


2.5 


1 " 


25 


10 


1 " 


42 


38.1 


1 " 


38 




1 " 


606 


5.1 


1 lb. 


78 


42 


1 " 


379 


36 


1 ton 



Time Cost 

in 
Minutes. 



Barley. . 
Wheat. . 
Hay. . . . 
Oats 
Rice. . . . 
Rye ... . 
Corn. . . . 
Potatoes. 
Tobacco. 
Cotton. . 
Bit. Coal 



30 bush. 
40 " 
2 tons 
40 bush. 
60 " 
25 " 
80 " 
220 " 
2,750 lbs. 
1,000 " 
200 tons 



5.427 
9.435 
465.25 
10.645 
17.042 
60.40 
31.97 
10.364 
13.22 
4.72 
113.88 



Having the time cost per unit of each of these com- 
modities, let us now ascertain the time cost of the total 
crops of these produced in the United States. This is 
exhibited in the table on the next page, which is derived 
from the figures given in the Year Book of the Depart- 
ment of Agriculture, 1907, p. 668. These, too, are assumed 
to be accurate. 

We see from this table that the total time cost of these 
principal crops, if produced with modern machinery on a 
large scale, would be 185,759,513,000 minutes, and that 
the money value of these commodities, sold at farm or 
mine, is $3,214,510,707. 

If, then, it would require 185,759,513,000 minutes' labor 
to produce $3,214,510,707 worth of commodities, how much 
labor would be required to produce $800 worth of these 
commodities? This is a problem in simple proportion: 



THE ECONOMIC ASPECT OF SOCIALISM 



231 



$800 : $3,214,510,707 : : x minutes : 185,759,513,000 
minutes. Working this out we find that x equals 46,230 
minutes or 770 hours and 30 minutes. Estimating 300 
working days to the year, this would seem to indicate 
that a social work-day of 2\ hours should be sufficient to 
procure the necessaries of existence, valuing these at 
$800. 





Average 


Average Total 






Total Time 


Commodity. 


Annual 
Production 


Value on Farm 
Dec. 1, 


in 
Minutes. 


Unit. 


Cost in 
Thousand 




1898-1907. 


1898-1907. 




Minutes. 




Millions 










Barley. . . 


117 bush. 


$53,872,896 


5.427 


1 bush. 


633,959 


Wheat. . . 


642 " 


444,206,221 


9.435 


1 " 


6,057,270 


Hay 


59 tons 


524,124,456 


465.25 


1 ton 


27,449,750 


Oats 


841 bush. 


265,595,639 


10.645 


1 bush. 


8,952,445 


Rice 


18 " 


14,594,913 


17.042 


1 " 


305,756 


Rye 


29 " 


16,527,099 


60.40 


1 " 


1,751,600 


Corn .... 


2,309 " 


953,158,114 


31.977 


1 " 


73,834,893 


Potatoes . 


255 " 


134,236,563 


10.364 


1 " 


2,642,820 


Tobacco . 


743 lbs. 


59,548,881 


13.22 


1 lb. 


9,822,460 


Cotton. . . 


5,233 " 


457,787,442 


4.72 


1 " 


24,699,760 


Bit. Coal . 


260 tons 


290,858,483 


113.88 


1 ton 


29,608,800 




$3,214,510,707 


185,759,513 



Before accepting the above conclusion, however, it will 
be necessary to make proper allowances for some important 
factors. First, the figures quoted from the Report do not 
include time spent on bookkeeping, upkeep, and repair 
of machinery, the time cost of the raw material, of the 
machinery, etc. All these items are certainly important, 
but we may safely assume that, taken together, they 
would probably not increase the total by fifty per cent. 
If, then, we allow an additional 1^ hours for these items, 
thus making the work-day 3f hours, we shall be well 
within reason. 



232 WHAT SOCIALISM IS 

Second, it is to be inferred that the ten crops for which 
the 13th Annual Report furnishes the time value were 
produced under unusually favorable conditions, if not 
actually on "bonanza" farms. It is true that the 
introduction (p. 12) affirms, in a blanket clause, "that the 
effort was made to ascertain, not the quantity of work 
that could be done under the most favorable conditions, 
but what was being accomplished steadily in everyday 
work"; nevertheless, in the absence of more specific 
information as to the actual conditions under which the 
units under discussion were farmed, we cannot ignore the 
doubt that arises in our minds. We may, however, 
offset this by two other factors which were quite conserv- 
ative in our estimate: (1) In adopting the sum of $800 
as a measure of the necessaries of existence, we have, as 
already shown, allowed nearly a third over and above the 
sum ($617.80) actually ascertained to be requisite in the 
years 1900-1901. (2) The figures in the 13th Annual Re- 
port are based upon investigations made from fifteen to 
twenty years ago, between 1890-95. The steady improve- 
ment in agricultural machinery which has been made since 
then would undoubtedly reduce the present time cost of 
these commodities very materially. It is not unreason- 
able, then, to urge that these factors counterbalance each 
other; but in order to be on the safe side let us add 
another quarter of an hour, thus making the probable 
work-day consist of a round four hours. 

We seem, then, to have warrant for believing that if 
agricultural production were socialized to-day a 1200-hour 
work-year would suffice to produce the necessaries, and 
an 1800-hour year, many of the luxuries, of existence for 
the community. This, arranged to suit the exigencies of 
agricultural production, might mean a twelve-hour work- 
day for four or six summer months, as the case may be. 



THE ECONOMIC ASPECT OF SOCIALISM 233 

Does this seem Utopian? Granted: all speculations of 
this sort must seem Utopian. And yet, if we look back 
a few centuries, we shall find, according to no less an 
authority than Thorold Rogers (" Six Centuries of Work 
and Wages "), that the English workman, during the 
fifteenth century and the first part of the sixteenth, lived, 
and lived well, on the product of an eight-hour-day. 
Is it, then, so fantastic to suppose that modern machinery, 
under a socialized system of production, could cut this 
day in two? 

The objection may be raised that this estimate is one- 
sided because it is based on figures for agricultural pro- 
duction only, whereas industrial production is really the 
more important half of the modern economic process; 
and that therefore the generalization could not apply to 
the whole economic process in a cooperative common- 
wealth. 

It is true, as already pointed out, that we do not have 
comprehensive data for all, or nearly all, the industrial 
products in actual use in the average household. But 
we have posited, hypothetically, a socialized agricultural 
community producing a quantity of goods which it can 
sell at the farm for an average $800 per family; this 
$800 sufficing, when brought to the village store or for- 
warded to the city, to buy the necessaries of existence for 
the family at retail. Now it is well known that under 
present conditions the retail price of any manufactured 
article comprises about one-third for actual cost of pro- 
duction, one-third for manufacturer's profits and account- 
ing costs, and one-third for selling costs. In other words, 
every such article, when it reaches the ultimate consumer, 
is weighted down with a load of barnacles of trade-profits 
of innumerable middlemen, rents, dividends, cost of 
advertising, and other trade-getting devices, etc., etc. 



234 WHAT SOCIALISM IS 

Part of this cost of distribution is undoubtedly legitimate 
and could not be dispensed with under any organization 
of society, no matter how scientific. The man engaged 
in producing the necessaries of life will always have to 
support the man engaged in transporting and distributing 
them, and the man engaged in manufacturing and repair- 
ing the machinery and other instruments of production 
necessary thereto. But it is impossible to believe that 
this auxiliary corps will ever, in a rational system of 
production, consume two-thirds of the ultimate retail 
value of most goods, as it does to-day. 

It would seem, therefore, that if the industrial com- 
munity organized itself in the same fashion as our hypo- 
thetical agricultural community, the exchange value of 
its products, whether stated in terms of social labor, time, 
or money, or any other standard of value, would actually 
be lower than our estimate assumes. By how much our 
four-hour work-day would be reduced we have no means 
of determining, but it could hardly be increased. 

Probably, therefore, four hours will constitute the 
average daily labor in a cooperative commonwealth, and 
these ought to be sufficient to give to every citizen not 
only the necessaries and comforts now enjoyed by the 
middle class, but some of the luxuries enjoyed only by 
the millionaire. 



CHAPTER II 

ECONOMIC CONSTRUCTION OF THE COOPERATIVE COM- 
MONWEALTH 

Few things deterred me from a study of Socialism 
more than the prevailing error that it necessarily would 
subject us all to the tyranny of a state which would, 
because it owned all the sources of production, be able 
to dictate to every one of us the kind of work we should 
do and the hours during which we should do it. It must be 
admitted that this is the Socialism described by many 
authorities, amongst them Schaffle, in a book still widely 
read, entitled the " Quintessence of Socialism. 77 But this 
book loses some of its authority when we remember that 
Schaffle followed it with another, entitled " Why Socialism 
is Impossible 77 ; and assuredly the state Socialism de- 
scribed by Schaffle is extremely unattractive to the 
bourgeois mind. 

It is not so unattractive to the workingman, because he 
now has these things determined for him by his employer 
without having any security of employment. State 
Socialism, therefore, has no terrors for him. On the 
contrary, as the workingman expects that the Socialist 
society will be controlled by workingmen, he expects 
to that extent to be his own master; that is, he will 
control the society that controls him. 

State Socialism, therefore, is the form probably most 
in vogue amongst workingmen. They have not before 

235 



236 WHAT SOCIALISM IS 

their minds the history of previous revolutions which 
have for the most part only substituted one set of masters 
for another. They cannot be expected, therefore, to 
appreciate the profound change that comes over men 
when put into positions of power, the temptations to 
which they are exposed, and the errors which even the 
best intentioned are likely to commit. 

I do not mean to condemn state Socialism; for state 
Socialism veritably controlled by the people would 
probably furnish better government than that which 
we are now given at the hands of capitalists. But I shall 
not attempt to describe the economic structure that 
would prevail under state Socialism, because it has been 
already described; whereas I do not think that there has 
been any effort made to describe a cooperative common- 
wealth in which the state would have very little more 
power than that enjoyed by the government in England 
or Germany to-day. 

The difficulty of assigning tasks and of determining 
wages which makes Socialism impracticable to the 
bourgeois mind is a pure fiction, encouraged, I admit, 
by many Socialist writers who imagine that Socialism 
can only come by a sudden and violent transfer of polit- 
ical power from the capitalist to the proletariat, called 
revolution. As will more fully appear in the next chap- 
ter, the Political Aspect of Socialism, such a revolution is 
by no means necessary; for the cooperative common- 
wealth, as I understand it, need not be introduced by 
any sudden transfer of political power whatever. 

In one sense, indeed, Socialism has in part come. The 
laissez faire school had barely announced their doctrine 
and proceeded to legislate in accordance therewith, before 
the abominable consequences of the laissez faire doctrine 
became so obvious that steps had at once to be taken to 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 237 

put an end to it. So the idea that a man could do what 
he liked with his own, which resulted in working women in 
mines to an extent which reduced them to the condition 
of the lower animals, the use of children in factories to a 
degree imperilling the future of the race, the reduction 
of men to starvation wages, the pollution of rivers by 
factory products, the spread of cholera by unwholesome 
dwellings — all gave rise to a series of legislative acts which 
limited the right of a man to exploit women and children, 
compelled landlords to maintain sanitary dwellings, and 
prevented the pollution of waters by factory products 
altogether. All this legislation was an unconscious 
tribute to that solidarity of the human race which is at 
the root of Socialism. 

Nor was this all. The state and city could so obviously 
perform certain functions better and cheaper than private 
corporations that enterprise after enterprise was slowly 
taken from individuals and assumed by the state. The 
postoffice was the foremost of these. The municipal- 
ization of gas, water, and trams, the nationalization of 
railroads, telegraphs, and telephones, have been pursued 
as purely economic measures rendered necessary by con- 
siderations of social welfare. 

Indeed, England has been rushing towards Socialism 
with such rapidity that increasing rates gave the cap- 
italists an excuse for frightening the public with threats 
of bankruptcy, and occasioned the reaction in municipal 
progress through which the country is now passing. But 
the forces behind Socialism are so overwhelming that 
they convert its very enemies into its unconscious 
prophets, priests, and promoters. 

Mr. Roosevelt, who has so lately entered the lists 
against Socialism, is with the exception perhaps of 
Pierpont Morgan and Rockefeller, the greatest practical 



238 WHAT SOCIALISM IS 

Socialist in America. When Mr. Roosevelt called to- 
gether the Governors of the States to consider what steps, 
if any, could be taken to prevent the shameful waste of 
our national resources by capitalistic enterprise, and when 
Mr. J. J. Hill in a remarkable summary counted up the 
awful loss to humanity involved in this waste, neither 
appears to have been aware that they were demonstrat- 
ing to the world not only that Socialism was good, but 
that it was indispensable. When Rockefeller brought 
together the distillers of oil into a single deliberately 
planned body, eliminating the waste of individual com- 
petition, he does not seem to have been aware that he 
was demonstrating the amazing advantage of eliminating 
competition and slowly preparing an industry for na- 
tionalization. When Mr. Morgan did the same thing 
for the Steel Trust, and the Coal Trust, and when he 
tried to do the same thing for the railroads until checked 
by a blundering government, 1 he, too, was unaware that 
he was demonstrating the failure of the very capitalistic 
system for which he stands. So the idol they themselves 
set up for worship they are engaged in smashing all to 
pieces; and they none of them see the humor of it. 

When a horse refuses to return to his stable and balks 
when brought to its door, a simple device overcomes his 
resistance: His head is turned away from the door and he 
allows himself to be shoved without opposition hind 
end foremost into the stable which he declines to enter 
in the more usual way. 

Roosevelt, Rockefeller, and Pierpont Morgan are just 
like this balky horse. They loudly proclaim that under 
no consideration whatever will they proceed front side 
forward, and yet in the middle of these protestations they 
are going hind side forward faster than perhaps is prudent. 

1 See Northern Securities Case, 193 U. S. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 239 

The difference between Socialists and Messrs. Roosevelt, 
Rockefeller, and Pierpont Morgan is that Socialists con- 
sider it more dignified to move front side forward; more 
intelligent to see plainly where they are going, and pro- 
ceed deliberately of their own motion instead of being 
pushed there backward by forces they pretend to ignore. 

§ 1. How Socialism May Come 

The many theories proposed as to how Socialism may 
come, can be generally classified into two: that it will 
come by revolution and that it will come by successive 
reforms. 

The so-called Marxian school calls itself revolutionary, 
and undoubtedly many members of this school are 
revolutionary, and have the idea that Socialism will come 
by revolution — by violence — while among the more 
thoughtful, this word is used to mean that Socialism will 
constitute revolution because it will transfer power from 
the exploiting class to the exploited class. 1 Others have 
confused ideas of the meaning of the word revolution in 
which the element of violence and that of the transfer of 
political power are more or less mixed. Socialism, of 
course, involves a transfer of political power, and since 
such a transfer is revolutionary, Socialism may be properly 
called revolutionary, though its coming may not be at- 
tended by violence. Many authors believe that Socialism 
will come by the use of extra political methods — not by 
successive reforms introduced by parliamentary methods, 
but by a general strike, or the conversion of the army, or 
adroit use of the conditions produced by war (as in 
Russia after the Japanese War) . 

Some, again, believe that Socialism may come by the 

1 Kautsky, "The Social Revolution." 



240 WHAT SOCIALISM IS 

development of a secret society which will secure the 
support of a sufficient number of those in the possession 
of our military stores and military places to permit of a 
conquest of political power by force. To those it may be 
suggested that the days for the success of secret societies 
are over. Capitalistic society possesses machinery in the 
shape of the press and the secret service which would 
make the success of a secret society impossible. The 
slightest indiscretion of one of its members under feminine 
influence or that of drink would be sufficient to break up the 
entire plan. 

The capitalists are in possession of the army, the navy, 
the police, the militia, and above all, the weapons with 
which to arm all these. Recourse to bullets seems un- 
necessary and dangerous when our enemy has the bullets 
and we have not, all the more when the work can be 
equally well done with infinitely less disorder and agony 
if we only have recourse to the ballots which we have and 
they have not. 

When a sufficient number of men are persuaded that 
Socialism is the best solution of our present economic 
evils, they can get what they want the day they choose 
to use the ballot for that purpose; whereas recourse to 
violence would lead not only to immediate disaster, but 
to an indefinite postponing of the desired result. For a 
very large part of our population which would, then, as 
now, be in doubt as to the wisdom of adopting Socialism, 
would certainly be driven by violence into the capitalistic 
fold and a period of capitalistic reaction would result. 
This has been observed in so many revolutions in the past 
that it is unnecessary to insist upon it here. 

This must not be interpreted, however, as intending to 
eliminate violence as a possible factor, in the coming of 
Socialism. Had Haywood been convicted it would have 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 241 

created an indignation so profound that a very widespread 
and dangerous uprising might have taken place, and 
although it would have been quelled, still, it is probable 
that such an uprising might have led to Socialistic legisla- 
tion. It is as impossible to state beforehand how large a 
part violence will play in the coming of Socialism as to 
state how much contributed to remedial legislation in 
Ireland — the violence of 1798 and the 60 ? s, or how much 
the parliamentary tactics of Parnell. 

Socialistic legislation is of two very different kinds, 
and these must be carefully distinguished. Bismarck 
inaugurated Socialistic legislation such as national in- 
surance, intended, by taking away part of the grievance 
of the workingmen, to diminish their discontent and their 
reason for espousing Socialism. 

Indeed, since the beginning of the nineteenth century 
legislation more or less Socialistic has been enacted in 
every civilized country in the world, partly owing to the 
bona fide desire on the part of legislators to put an end 
to evils that shocked their moral sense, but perhaps far 
more by legislators who thought to satisfy Cerberus with 
a sop. Socialistic legislation, therefore, enacted by cap- 
italistic legislators for the purpose of appeasing popular 
discontent, does little towards promoting Socialism. 
Some Socialist writers claim that it does nothing to this 
end, but this view is extreme and I think incorrect. For 
example, it would be impossible for Socialism to come 
without violence had not the nations of the world been 
slowly conferring the franchise upon the class in whose 
interests and through whom Socialism will come. So- 
cialistic legislation of a character to put the political 
weapon in the hands of the people, through which they 
can secure the transfer of political power from those who 
now enjoy it to themselves, is of the utmost value. Indeed, 



242 WHAT SOCIALISM IS 

it is of so much value that those Marxian Socialists who 
protest against all compromise with capitalistic parties 
must have forgotten that it is through the capitalistic 
parties, and through compromises of Socialists with 
capitalistic parties, that these measures of political re- 
form have been enacted. In Belgium to-day the So- 
cialists are combining with the Radicals to wrest universal 
franchise from the Catholics. 

Again, Socialistic legislation which improves the con- 
dition of the working class, though it takes away a part 
of their grievance and does, to that extent, diminish 
the incentive to Socialism, nevertheless strengthens the 
workingmen, raises their standard of living and of 
thought, and gives them the very education and equip- 
ment they need in order to become Socialists. 

Nevertheless Socialistic legislation obtained from cap- 
italistic legislators can never effect the final transfer of 
political power from the exploiting to the exploited class 
without which no Socialist commonwealth can be secured. 
Here, therefore, we see the elements which confuse this 
question of revolution and reform. The Marxian Social- 
ists in Germany have seen Socialistic legislation enacted 
year after year and have seen it, by diminishing evils, 
tend to diminish enthusiasm for revolution. Moreover, 
revolutionary German Socialists, conscious that they have 
to destroy the existing political machinery represented by 
the Emperor, the nobles and the church; conscious too, 
that the farmer class is essentially capitalistic in its tem- 
per and thought, and despairing therefore of getting a 
parliamentary majority, naturally look to extra political 
methods as the only ones at their disposal. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 243 



§ 2. Reform and Revolution 

There is great and regrettable confusion as regards 
the words reform and revolution. The Socialist party 
calls itself revolutionary, and as revolution is connected 
in the minds of most people with violence, the popular 
impression is that the Socialist party stands for violence. 
This is a profound mistake. The whole subject has been 
w^ell treated by Kautsky, an authoritative leader of the 
Socialist party; and he distinctly disavows violence. 
Revolution to him is a " transfer of political power from 
one class to another." The French Revolution trans- 
ferred political power from the king, the noble, and the 
church to the bourgeois. The Socialist revolution is to 
transfer political power from the bourgeois to the pro- 
letariat. 

Here a word of caution must be said : Socialist literature 
is written for the most part by the proletariat for the 
proletariat; and it is natural that it should abound in 
just such phrases as these. Not that the phrase is wrong 
or incorrect; rather is it incomplete. To-day, in France 
the Republic is largely supported by the nobles of yes- 
terday; so also will the proletarian government of the 
Socialist revolution be largely supported by the bourgeois 
of to-day. 

The word revolution, therefore, is used here not to 
convey the idea of violence, but rather in the sense of the 
revolution of the planets, or of the seasons. It is as it were 
the closing of one cycle and the beginning of another. 
There is, of course, a great difference of opinion as to 
how this revolution is to be effected — whether by par- 
liamentary methods or extra-parliamentary methods 
such as strikes. Into this subject, however, this book, 



244 WHAT SOCIALISM IS 



i 



being addressed to non-Socialists rather than to Socialists, 
will not enter. It is purely a question of tactics and may 
be said to have been solved in America for the present 
by the very existence of a Socialist party which puts up 
candidates at every election wherever feasible in order 
to do what can be done in the direction of Socialism by 
constitutional methods. 

There is, however, another use of the word revolution 
concerning which it is of the utmost importance to be 
clear. Socialists often say that " Socialism must come 
by revolution and not by reform." What is exactly the 
meaning of this sentence? What is the difference between 
reform and revolution? 

Reformers proceed upon the assumption that the com- 
petitive system is good and that capitalists can be en- 
trusted with the task of reforming it so to eliminate its 
admitted evils. The revolutionary Socialist on the con- 
trary says that the competitive system is bad and that 
the capitalist cannot be entrusted with the task of putting 
an end to it. So he decries mere reform and insists upon 
nothing less than revolution, the transfer of political 
power from the capitalist to the people at large. There 
is thus between the reformer and the revolutionary 
Socialist a difference of principle; the one upholding the 
competitive system and the other denouncing it. 

But there is also another difference of hardly less im- 
portance between the reformer and the revolutionary 
Socialist — a difference of method. A bourgeois re- 
former has no preconceived plan of reform. He hits at 
every evil like an Irishman at a fair — as he sees it. Gov- 
ernor Hughes, who belongs to this class, thought in 1908 
that race track gambling was the greatest evil of existing 
conditions and devoted the entire session of the legislature 
to an anti-race track gambling bill which he triumphantly 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 245 

passed, only to see it nullified at the first opportunity 
by the courts. In 1909 he thought that a primary 
election bill was the most important reform; but this 
primary election bill failed to pass. The legislature, 
very much under his guidance, spent two years in 
passing a useless anti-race track gambling bill and re- 
fusing to pass a primary bill, although during these two 
years at least 200,000 men have been seeking employment 
and not finding it, and a population therefore of about 
a million x in New York State alone has been on the verge 
of starvation in consequence. 

The most striking feature of the bourgeois reformer 
is his lack of sense of proportion; but there is a reason 
for it. Unemployment is not a popular subject with the 
class to which Governor Hughes belongs. As an evil it is 
too merciless; as a resource it is too unavowable.2 So 
it is impossible to get any legislature in any State in this 
Union effectively to consider the subject of unemployment. 

The Socialist, on the contrary, has a definite precon- 
ceived plan of legislative enactment. While the reformer, 
however well-intentioned and intelligent, is hacking away 
at random at the jungle of evils in which the competitive 
system encompasses him, and hardly ever attaining any 
substantial progress, the Socialist has his course directed 
for him by the polar star. He regards such bills as anti- 
race track gambling as a waste of time. Race-track 
gambling is a necessary and poisonous fruit of the com- 
petitive system. It is useless to attack the fruit and 
leave the tree standing. The only legislation, therefore, 
that interests the Socialist looks towards putting an end 

1 Upon every breadwinner there are on an average four persons 
dependent — the aged, women, and children; 200,000 unemployed 
is therefore equivalent to 1,000,000 in want. 

2 See Book II, Chapter I, Unemployment. 



246 WHAT SOCIALISM IS 

or a check to the competitive system that results in the 
exploitation of the Many by the Few. And of all the 
evils the one that has stood out most startling and appall- 
ing during the last two years is the evil of unemployment. 

The immediate demands of the Socialist party published 
at the end of the Socialist platform/ indicate the char- 
acter of measures which the Socialists urge. In one 
sense these are reforms, many of which Governor Hughes 
favors, but they all tend towards one definite end — the 
limitation and ultimate suppression of the competitive 
system with the exploitation of the Many by the Few. 
In one sense, therefore, Socialists are reformers, but 
revolutionary reformers; all their reforms look towards 
the transfer of political power from the Few who exploit 
political power for their individual benefit, to the Many 
who will utilize political power for the benefit of all. 

Having indicated the difference between reform and 
revolution, let us consider how far the Socialist is justified 
in saying that the competitive system is so bad that it 
cannot be improved — that it must be replaced altogether. 

When a wagon is thoroughly worn out, it is useless to 
repair it; for if one part is strengthened it throws the 
strain upon a neighboring part which breaks down; and 
if that part is strengthened it throws the strain upon 
another which again breaks down. It is possible by 
intelligently renewing various parts of the wagon upon 
a preconceived plan, eventually to replace the broken- 
down wagon by an entirely new one; but the difficulty 
of doing this is extreme, and the wagon when so recon- 
structed, being composed of parts of different ages, must 
again give way at its most worn part. So experience 
indicates that it is better to throw a fairly used-up wagon 
on the junk heap and build a new one in its place. 

1 See Appendix, p. 412. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 247 

Reform measures such as we have had under former 
administrations resemble an effort to patch up a worn- 
out wagon; for a reform measure directed at one evil is 
found to produce other evils very apt to be as great, if 
not greater than those that the measure is trying to 
suppress. Not many years ago a society for the sup- 
pression of vice made a crusade in New York upon 
vicious resorts. Such resorts are abominable; they 
should not exist in an orderly community. But at- 
tacking these resorts, without attacking the conditions 
that created them, only distributed the evil all over the 
city, involving a pernicious contact with unperverted 
youth. 

Again, the difficulty of reconciling Sunday closing of 
barrooms with furnishing bona fide travellers at hotels 
with refreshments was solved in New York by the Raines 
law, which defined a hotel by establishing a minimum of 
bedrooms. The result was that to almost every bar- 
room there is attached this minimum of bedrooms to 
permit of the sale of liquor on Sunday; and this effort 
to secure Sunday closing has resulted in converting the 
barroom into a house of prostitution. 

Again, legislation for putting an end to the awful 
congestion and filth of the New York city tenements 
has by imposing upon the landlord expensive repairs, 
raised rents, so that, although the tenement dweller is 
little benefited because of evasion of the law, his rent 
has been uniformly raised. 

In the chapters on the Scientific and Ethical Aspects 
of Socialism, an effort will be made to show why the 
competitive system is essentially bad and must remain 
bad so long as acquisitiveness is deliberately made the 
dominating motive of human activity; and how by 
modifying economic conditions we can secure all the 



248 WHAT SOCIALISM IS 

benefits of a tempered acquisitiveness without the ap- 
palling results of an acquisitiveness that knows no bounds. 
This argument belongs, however, to the constructive 
argument for Socialism, and we have not yet completed 
the destructive argument against existing conditions. 
For there are two further illustrations furnished by 
recent efforts to curb competition which not only tend 
to demonstrate the hopelessness of the task, but throw 
light upon existing conditions and impending dangers. 
I refer to the rate law and legislation tending to control 
monopolies — to the inevitable tyrannies of the trust and 
the trade unions and the irreconcilable conflict between 
the two. 

§ 3. Possible Transitional Measures 

I shall describe the cooperative commonwealth on the 
theory that it is to come gradually, not because I con- 
sider this the only way for Socialism to come, but one of 
the possible ways and the one most intelligible to the 
bourgeois mind. 

Morris Hillquit and John Spargo have given good 
sketches of the Socialist state. 1 I shall adhere closely 
to their views, emphasizing and detailing them; and I 
am the more glad to adopt this plan because both are 
members of the National Executive Committee of the 
Socialist party and will not be accused of taking the 
bourgeois view of Socialism; whereas because I have 
been a bourgeois, I am likely to be accused of this. 

Mr. Spargo begins by repudiating the idea of the 
Socialist state as a "great bureaucracy" and declares 

1 " Socialism." By John Spargo, p. 217. 
"Socialism in Theory and Practice." By Morris Hillquit, 
Chapters V and VI. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 249 

the Socialist ideal to be a "form of social organization 
in which every individual will enjoy the greatest possible 
amount of freedom for self -development and expression; 
and in which social authority will be reduced to the 
minimum necessary for the preservation and insurance 
of that right to all individuals." 

The rights of the individual Mr. Spargo summarizes as 
follows: 

" There must be perfect freedom of movement, in- 
cluding the right to withdraw from the domain of the 
government, to migrate at will to other territories; 
immunity from arrest, except for infringing others' rights, 
with compensation for improper arrest; respect of the 
privacy of domicile and correspondence; full liberty of 
dress, subject to decency; freedom of utterance, whether 
by speech or publication, subject only to the protection 
of others from insult, injury, or interference with their 
equal liberties. Absolute freedom of the individual in 
all that pertains to art, science, philosophy, and religion, 
and their teaching, or propaganda, is essential. The 
state can rightly have nothing to do with these matters; 
they belong to the personal life alone. Art, science, 
philosophy, and religion cannot be protected by any 
authority, nor is such protection needed." 

On the other hand, he summarizes the functions of 
the state as follows: 

" The state has the right and the power to organize and 
control the economic system, comprehending in that 
term the production and distribution of all social wealth 
wherever private enterprise is dangerous to the social 
well-being, or is inefficient; the defence of the community 
from invasion, from fire, flood, famine, or disease; the 
relations with other states, such as trade agreements, 
boundary treaties, and the like; the maintenance of 



250 WHAT SOCIALISM IS 

order, including the judicial and police systems in all 
their branches; and public education in all its depart- 
ments. " 

The state, according to Mr. Spargo, is not to own all 
sources of production (this is state Socialism) ; but is 
to have the right and power to organize and control 
the economic system. There is between these two state- 
ments all that distinguishes the crude Socialism of the 
nineteenth century from the practical Socialism of to-day. 
This is emphasized by Mr. Spargo when he states that 
"Socialism by no means involves the suppression of all 
private property and industry"; and the further recogni- 
tion that the "Socialist state will not be static"; that is 
to say, it will not once for all decide that certain in- 
dustries must be socialized and certain other industries 
be left to individual initiative. 

The dominant factor that will determine these things 
is the public welfare. When private property in a partic- 
ular thing is found injurious to public welfare, it will be 
taken over by the state for the purpose of being socialized, 
as will hereafter be explained. When it is deemed that 
private property in a public industry is injurious to public 
welfare, this industry will be socialized. When, on the 
contrary, it is found that by socializing an industry the 
advance of that industry tends to be paralyzed, private 
initiative will be encouraged to enter into that industry. 
Indeed, the economic structure of the commonwealth 
will be such that inefficiency in a socialized industry will 
automatically give rise to the competition of private 
initiative therein. 

I have used the expression "socialized industry." 
It is above all things important that we should be clear 
as to what these words mean; for it is the socialization 
of industry which is the modern substitute for the Social- 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 251 

ist state. We cannot understand this better than by 
taking a concrete example. 

Let us assume that the public has become convinced 
that a few individuals have already too long grown in- 
ordinately rich out of the refining and distribution of 
oil, and that the time has come for this industry to be 
socialized. The old theory was that the state would 
expropriate this industry and become the emplo}^er of 
all engaged in it. It is argued in favor of such a system 
that if the state can be entrusted with the distribution 
of letters, it can also be entrusted with the distribution 
of oil; and this is undoubtedly true. But if this same 
argument is applied to all industries it will expose the 
state to two great dangers: the state will be overbur- 
dened by the multiplicity and vastness of these tasks; 
and the state will become despotic. And because this 
task is greater than any one set of men can properly 
perform; even though the intentions of the members of 
the government be the best possible, errors of judgment 
and errors of detail will involve the state in injustice 
and discontent. 

This difficulty can be met by not putting all these 
functions upon the state, but by so providing that the 
men shown in the past best able to handle a particular 
industry should continue to handle it. The socialization 
of the Standard Oil industry would simply mean the 
elimination of capitalistic control and exploitation. In 
taking over the oil industry, the state would doubtless 
adopt the method already adopted in taking over rail- 
roads, etc. A board would be appointed to take expert 
testimony as to the valuation of the industry, to determine 
the real value of every share. It would be called upon 
to value every stockholding with a view to determining 
to what compensation each stockholder was entitled; 



252 WHAT SOCIALISM IS 






because a distinction will have to be made between 
various classes of stockholders. Some stockholders have 
purchased their stock out of the economies of an in- 
dustrious lifetime. They depend upon the dividends 
from such stock to support their old age. To cut down 
the income they derive from this stock might not only 
work an injustice, but work an injury to the common- 
wealth; for if these stockholders had not sufficient in- 
come to support themselves, they would become a bur- 
den on the state. Other stockholders would be found 
to have sufficient wealth to support a considerable reduc- 
tion in the valuation of their stock without hardship. 
Others again would have such enormous wealth, that, 
having much more income than they can possibly spend, 
the reduction of their income would mean no hardship 
save that of depriving them of power for the most part 
exerted at the present time injuriously to the common- 
wealth. 

Experts, therefore, appointed by the state to make 
estimates with a view to the transfer of an industry from 
private to social ownership will have two distinct func- 
tions to perform: the function that boards of experts in 
similar cases perform to-day, to estimate the actual value 
of the property; and to estimate the wealth of the re- 
spective stockholders and classify stockholders according 
to wealth with the view of effecting the transfer from 
private to social ownership without injustice to the 
individual or injury to the commonwealth. It is probable 
that compensation to stockholders will consist of annui- 
ties rather than lump sums. The advantage of com- 
pensation by annuity rather than by cash payment is 
considerable. As the state is taking over industries it 
will be more difficult for individuals to find investment 
for lump sums than to-day. As the state is looking 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 253 

forward to taking over industries to a sufficient extent to 
eliminate pure capitalism l altogether, it is to be hoped 
that future generations will not feel the need of capital 
of their own and will be all the more read)' to enter into 
the cooperative scheme of industry if, having no capital, 
they have to work each in his own industry under the 
new and prosperous conditions which cooperative pro- 
duction ought by that time to have brought about. 

Cases will undoubtedly be found where wealthy parents 
have worthless or defective children and grandchildren. 
Again, some parents have so contributed to the develop- 
ment of industry of the nation, as in the case of Mr. 
John D. Rockefeller and Mr. J. Pierpont Morgan, that 
it may seem proper that the compensation given in the 
shape of an annuity to them should not end abruptly 
at their death; but that a part of it should be continued 
to their offspring. This question is one of conscience as 
well as of social welfare; and in view of the enormous 
importance of it to the wealthy of to-day, it is a pity 
that they confine themselves to denouncing Socialism, 
and by so doing, leave the elaboration of the Socialist 
program to a party of discontented which is likely to 
deal with them when the day of expropriation arrives, 
not only without mercy, but without justice. 

To judge of the difficulty of determining the questions 
likely to arise, let us consider for a moment the case of 
Mr. Rockefeller. 

Mr. John D. Rockefeller has testified over and over again 
that for many years he has had nothing to do with the 
management of the Standard Oil, and yet he draw r s from 
the Standard Oil an income so enormous that, not being 

1 By "pure capitalism " is meant the ownership of industry 
entitling the owner to dividends although the owner contributes 
nothing to the industry in the way of personal service. 



254 WHAT SOCIALISM IS 

able to spend more than a fraction of it, he has invested 
the balance in railroad shares and thus become master of 
a large part of our railroad system. I myself believe 
after a careful study of the organization and development 
of the Standard Oil that Mr. Rockefeller has amassed his 
fortune strictly in conformity with law. He has, it is 
true, deliberately lied at certain critical periods. But 
lying is not a crime, and is not actionable except under 
specified conditions. Mr. Rockefeller then is not a 
criminal. He simply presents a case where, having 
rendered an immense service to the community, he has 
received as a remuneration for that service wealth that 
surpasses the dreams of avarice. 

If Mr. Rockefeller's holdings in the Standard Oil were 
expropriated by the state without one dollar of remunera- 
tion, Mr. Rockefeller would still be in possession of a far 
larger income derived from his railroad holdings than he 
and all his family could possibly spend. It is probable, 
therefore, that in such cases as those of Mr. Rockefeller, 
J. Pierpont Morgan, and others of their class, the state 
would make a valuation of all their wealth, leave them 
what it is proper they should have, and expropriate the 
rest. Even though there were left to multi-millionaires 
more income than they could possibly spend, the surplus 
expropriated by the state out of each of their swollen 
fortunes would leave to every industry a large fund which 
could be applied to increasing wages, improving conditions, 
and reducing prices. If, for example, it turned out that 
the income Mr. Rockefeller derives from his railroad 
shares is more than he can spend and that, therefore, 
there were no reason why he should continue to own any 
shares in the Standard Oil whatever, the dividends 
accruing from the shares now held by Mr. Rockefeller 
in the Standard Oil would be applicable to improving 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 255 

the conditions of those who work for the Standard Oil. 
It is probable that Mr. Rockefeller owns about one-half 
of the shares in the Standard Oil. All the dividends 
now paid to Mr. Rockefeller would in such case be applic- 
able to these things. Such a solution would permit of 
tlie division of the enormous dividends which are being 
paid to-day to Mr. Rockefeller amongst the working body 
of the Standard Oil. 

As to compensation, there is considerable disagreement 
in the Socialist party, and many Socialists would not 
admit the principle of compensation at all. In France, 
it is probable that these last constitute, if not a majority, 
at any rate a very large minority of the party; but in 
America I think it can be said that the Socialist party 
stands for compensation. In support of this contention 
I cannot do better than quote a passage from the article 
of Mr. Steffens in Everybody's Magazine, Oct., 1908. 1 

This passage is extremely illuminating because we find 
in it the opinions of two men thoroughly representative 
of the two wings of the Socialist party: Eugene Debs, 
who is what Mr. Roosevelt would call "an extreme 
Socialist"; that is to say, he looks at Socialism from the 
revolutionary point of view; he regards the issue as 
between the capitalist on the one side and the proletariat 
on the other; he is an ardent exponent of the class 
struggle theory; his sympathies are exclusively marshalled 
on the side of the poor, and his first impulse, therefore, 
on being questioned on this subject, is to express an 
opinion contrary to compensation. And yet his ideas 
on this subject are not so rooted but that they can at 
once be corrected when he is reminded by Victor Berger 
of the evils likely to result from expropriation without 
compensation. 

1 See Appendix, p. 428. 



256 WHAT SOCIALISM IS 

To those unfamiliar with the personnel of the Socialist 
party, it is important to say a word regarding Victor 
Berger. He is the editor of the Social Democratic Herald, 
published in Milwaukee; but he is far more than this._ 
He is the recognized leader of the Socialist party in Wis- 
consin, the only State in which Socialism has succeeded 
in electing members to the municipal council and to the 
• State legislature. No one who reads his editorials can 
fail to recognize that he is not only an economist, but a 
scholar. He is regularly elected to the National Executive 
Committee of the Socialist party at the head of the poll; 
and although I must not be understood to imply that 
there are no other men in the party of as great weight as 
Mr. Victor Berger, I think it may be stated without fear 
of contradiction that he to-day has more personal in- 
fluence in the party than any other one man. The ease 
with which he brought the Presidential nominee around 
to his view on the subject of compensation is a measure 
of his influence. I think that upon the subject of com- 
pensation the opinion of Victor Berger is likely to prevail. 1 

The socialization of industry does not mean any change 
in the personnel of the industry whatever. Every man 
drawing salary or wages from the Standard Oil will go 
on drawing salary or wages as before. The industry will 
be handed over to those who actually maintain and work 
at it. These men will run the industry in very much 
the same way as did the guilds in the Middle Ages, sub- 
ject to the payment of annuities to old stockholders 
determined by the court. 

There would, however, be some notable distinctions 
between the medieval guild and the guild under a co- 
operative commonwealth. 

The latter would not constitute a complete monopoly; 

1 Saturday Evening Post, May 8, 1909. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 257 

on the contrary, independent refiners would continue 
to refine and distribute oil, maintaining a wholesome 
competition of a character to prevent the oil guild from 
becoming perfunctory and inefficient. This competi- 
tion would tend to avert the evils that attended the close 
monopoly of the medieval guild, practically all of which 
can be traced to the completeness of their monopoly. 

Again the state would not own the oil industry ; it would 
reserve the right to control it. No direct control need be 
exercised providing the industry were wisely admin- 
istered; but if the industry had recourse to devices for 
crushing out competition to which the trusts to-day 
habitually resort, the state would exercise this direct 
control by appointing one or more members to the gov- 
erning board of the industry. The oil guild would, 
therefore, be kept upon its good behavior, both by the 
competition of the independent refineries and by the 
danger of state intervention. 

When the public became convinced that the time had 
come for the socialization of the steel industry, exactly 
the same process would be adopted. In this case, the 
function of those who had to value stockholdings would 
be facilitated. It has never been revealed how much 
J. Pierpont Morgan got in common stock for his role in 
the organization of the Steel Trust; but it is known that 
the amount of stock taken by him on that occasion was 
enormous. It would be interesting to calculate the 
number of hours of work he personally spent in promot- 
ing this trust and to compare these hours with the amount 
of stock which he received as a price of this service. Such 
a method might facilitate the work of those who had to 
value the stock and determine the amount to which he 
was entitled for the service he rendered. 

The socialization of industry, therefore, will be seen to 



258 WHAT SOCIALISM IS 



be* a process in which, once started, the state need have 
little further to do. It will practically consist of a transfer 
of the industry from the hands of the capitalist to the 
hands of those actually engaged therein. It will involve 
the valuation of every stockholding in such a fashion 
that the capitalist will during his life receive in some cases 
all, though in other cases less than he has heretofore 
received; so that the excessive income now enjoyed by the 
capitalist will be applicable to improving the conditions 
of those engaged in the industry; it will also be applicable 
to the reduction of cost to the consumer. And this proc- 
ess applied to every trusted industry will have for 
immediate effect gradually to improve the condition of 
the workingmen. When applied to them all, not only 
will the workers receive an increased wage, but the wage 
they receive will have its purchasing power increased by 
the lowering of prices in all industries. Obviously this 
system is not going' immediately to put the luxuries now 
enjoyed by the multi-millionaire at the disposal of every 
workingman; but it will increase them as the annuitants 
die, so that with the disappearance of the first genera- 
tion of multi-millionaires, the conditions of labor will be 
still further improved; and with the disappearance of 
the second generation, to whom doubtless some annuities 
will also be given, the workingman will receive all the 
benefits now given to the capitalist. 

Inasmuch as the wage-earners now receive on an 
average a little less than one-half of the whole profits of 
the industry, from this socialization of industry alone 
the laborer's will ultimately have their compensation 
doubled by increase of wage and decrease of prices. 

By "worker"' is not meant what we now call working- 
men alone. It includes all engaged in industry through 
the work of their hands or their heads. It is a common 




ECONOMIC CONSTRUCTION OF COMMONWEALTH 259 

error into which Mr. Roosevelt has fallen that Socialism 
proposes to improve the condition of the one at the ex- 
pense of the other; that it is a doctrine of Socialists that 
"all wealth is produced by manual workers." 1 No such 
foolish proposition has ever been propounded by any 
Socialist however "extreme." 2 Socialists recognize the 
enormous role played by brain in the organization and 
administration of industry. What Socialism seeks to do 
is to eliminate the idle stockholder — not the industrious 
manager. If Mr. Roosevelt would cast his comprehensive 
eye around the class to which he belongs, he will observe 
that it is composed in great part of idle stockholders who 
contribute nothing whatever to the work of the in- 
dustries which furnish their dividends. And bec-ause 
these stockholders are idle, he will find that they tend 
also to be "thriftless and vicious," and that he is de- 
nouncing his own class when he characterizes as " morally 
base" the proposition that "the thriftless and the vicious, 
who could or would put in but little, should be entitled 
to take out the earnings of the intelligent, the foresighted, 
and the industrious." He is very hard on them; he 
says this is living by "theft or by charity" and that this 
means "in each case degradation, a rapid lowering of 
self-respect and self-reliance." 3 If a Socialist were to 
use this language of the idle stockholders, he would be 
characterized as intemperate. I would not myself go 
so far as Mr. Roosevelt. There are many idle stock- 
holders who, because they are unconscious of living "by 
theft or by charity" have preserved a social conscience 
that sets them to righting the wrongs of the many. Mr. 
Roosevelt himself, indeed, belongs to this very class. 

1 Outlook, March 20, 1009, p. 622. 

2 Ibid., p. 619. 

3 Ibid., p. 623. 



260 WHAT SOCIALISM IS 

If he ever takes the trouble to understand Socialism, he 
will see that it proposes to put an end to the class that is 
idle and tends to be "thriftless and vicious"; that in 
other words, in this as in every other point on which Mr. 
Roosevelt attacks us, Socialism stands for the very op- 
posite of what Mr. Roosevelt thinks. It proposes to take 
our industries out of the control of the idle and hand them 
over to the industrious, whether their industry be of the 
hand or of the head. 

The result of such transfer will be to leave every man 
doing the work which he is already doing; to improve 
his condition; to keep alive the competition necessary 
to prevent inefficiency or perfunctoriness and make 
character; to diminish the stakes of the game, so that 
the worker shall not lose health and happiness as now, 
but shall secure more or less of the luxuries of life. And 
industry will be so organized that no man who wants 
to work shall be without work; and no one who does 
not want to work shall be allowed to be idle. 

Having explained what is meant by the socialization 
of industry, and pointed out how small the role of the 
state need be in the socialization of industry at large, we 
may next proceed to consider certain industries in which 
the state does, to-day, in other countries and would in a 
cooperative commonwealth certainly play the dominant 
role. In the first place, the state would own all natural 
monopolies. By the word "state" must not be under- 
stood the Government at Washington alone. Certain 
monopolies are national monopolies and would therefore 
be owned by the national Government at Washington; 
for example, railroads, telegraphs, national forests, 
national waterways, etc. But it is the local authorities 
that would take over such local monopolies as tramways, 
electric works, gas works, and all those things that are 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 261 

essentially municipal in their nature. The wisdom of 
this transfer of natural monopolies from private to public 
ownership it is not necessary to discuss. The enormous 
advantages that have attended this transfer in countries 
where it has been conscientiously tried leave no room for 
discussion except by those who have a personal interest 
in it, and to those this book is not addressed. More- 
over, this subject will be treated in the next chapter. 

There are, however, certain industries which, because 
they are intimately connected with public hygiene, it 
seems indispensable that the municipality should take 
over. I refer to such industries as packing houses, 
butcher shops, pharmacies, and the production and dis- 
tribution of milk, ice, and bread. 

The recklessness with which we allow ice companies to 
distribute ice collected from ponds into which the drain- 
age of a large population filters and from the head waters 
of such rivers as the Hudson, which receives all the sewage 
of Albany, Schenectady, and Troy, seems incredible, 
were we not already familiar with the recklessness which 
hands over all our industries to a competitive system so 
fierce in its operation that adulteration is its necessary 
consequence. 

Many of the bakeshops which furnish us with our bread 
baffle description, and on the poisons which are intro- 
duced into our milk I have already dilated. Wherever 
the temptation to adulterate is considerable and the 
consequence of adulteration to public health great, the 
community should not accept the risk that arises from 
competition except within the narrowest possible limits. 
For this reason, it will doubtless be wise for a cooperative 
commonwealth to own and run packing houses, butcher 
shops, pharmacies, bakeries, and to produce and dis- 
tribute milk and ice. 



262 WHAT SOCIALISM IS 

As regards ice, it is amazing that the municipal author- 
ities should not have undertaken this task before — 
especially in view of the raising of the price of ice for the 
poor by the Ice Trust. Every city has to supply its_ 
citizens with water, and as they are in control of pure 
water, it should be as much the function of the city to 
furnish pure ice as pure water. They have reservoirs 
free from pollution from which ice could be cut; and 
nothing but the political influence of the Ice Trust on the 
one hand, and the stupid indifference of the consumer 
on the other, has permitted this business to remain in 
private hands. 1 

The enormous profits made by the Meat Trust would 
permit not only of sanitary handling of this industry, but 
proper compensation to all engaged therein, and a 
notable reduction in the price of meat. 

The fact that the baking industry is not trusted will 
make the taking over of this industry by the state a more 
difficult undertaking, but not for that reason an im- 
possible one. 

Competition is not necessarily to be eliminated in the 
taking over of these industries. It is quite possible 
that the state might not furnish good bread, and it ought, 
therefore, to be permissible for any individual to enter 
into this business. The competition will be limited 
because, inasmuch as the state will charge for its bread 
very little above cost price, few will be induced to enter 

1 On the very day of writing of the above, the N. Y. Times 
of June 25, 1909, states that the United States Postoffice De- 
partment has installed a complete ice-making plant which has made 
such economy that the Government is considering the building 
of an ice-plant for all its departments. Private dealers charge 
at the rate of $7.65 a ton for ice, whereas the Postoffice Depart- 
ment now furnishes ice at a cost of 65 cents a ton. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 263 

into this business out of the desire for making money. 
The only motive that will induce citizens to enter into 
the business will be that of furnishing bread to their 
taste. Moreover, such industries would have to comply 
strictly with hygienic conditions, and they would be not 
so numerous as to make inspection as difficult, ineffectual, 
or expensive as to-day. 

The production and distribution of milk suggests a 
function of the state to which sufficient importance 
cannot be attached. I mean the creation of farm col- 
onies. On this single point I am not supported by the 
authority of the Socialist party. In other words, farm 
colonies have never been suggested as a part of the 
Socialist program; but this seems to be due to an 
oversight, for there does not seem to be in the Socialist 
party, as far as I can judge of it, any opposition to the 
idea. And the role of the farm colony seems to me of 
such importance that it is hardly possible to give too 
much attention to it. 

§ 4. Farm Colonies 

The first farm colony was established in Holland. 
The system has since taken root all through Europe, but 
has reached its finest development in the Canton of Berne, 
in Switzerland. It proceeds upon the principle that 
while it is difficult to make money out of farm land, it is 
easy to get nourishment from it, and that the most 
obvious remedy for idle labor is to apply it to idle land. 

In Switzerland it is also recognized that idle labor is 
divided into two distinct classes — the unemployed and 
the unemployable — and the unemployable must be again 
classified into those unable to work through physical 
defect and those unable to work through moral defect; 



264 WHAT SOCIALISM IS 

that is to say, those who are morally willing and physically 
unable and those physically able and morally unwilling. 
There are therefore in Switzerland two different kinds of 
farm colonies: forced colonies which deal with the tramp, 
the drunkard, and the misdemeanant — all those persons 
upon whom discipline has to be exercised; and free col- 
onies for those physically disabled or who are out of 
employment through causes over which they have no 
control. 

It is in the poorest countries in Europe that farm 
colonies have reached their highest development. Swit- 
zerland has been driven to organize farm colonies by the 
fact that she is too poor to disregard the burden of the 
unemployed and unemployables. It is in the richest 
countries, England, France, and America, that the farm 
colony system has been most neglected. The farm 
colony plan is the cheapest as well as the best way of 
solving the problem of pauperism, deserving or undeserv- 
ing. This question has been fully treated elsewhere * and 
it is only referred to here in sufficient detail to explain 
why it is believed that the farm colony system will form 
an essential feature of every Socialistic community. For 
although there will be an enormous diminution in the 
number of those unwilling or unable to work (for the 
reason that under a cooperative commonwealth no one 
need be overworked and, therefore, no one need be 
reduced to the physical exhaustion which is the prime 
cause of pauperism), and although there will be fewer 
drunkards because drunkenness, also, is largely due to 
overwork, nevertheless, until the cooperative common- 
wealth has been in operation several generations, that 
part of the population that is unwilling or unable to work 

1 "The Elimination of the Tramp," by Edmond Kelly. (G. P. 
Putnam's Sons.) 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 265 

will have to be provided for. And even later there will 
certainly be some part of the population that will require 
discipline as regards work. The farm colony system, 
more and more indispensable in our existing civilization, 
will perform an important role in the gradual transfor- 
mation of society from the competitive to the cooperative 
form. It probably presents to-day one of the most perfect 
pieces of constructive Socialistic work in which legislators 
can engage. For it has the extraordinary advantage of 
satisfying an immediate necessity of the competitive sys- 
tem and at the same time realizing some fundamental 
principles of Socialism; for example, that every man and 
woman is entitled to work; that the aged are entitled to 
support; and that the state should own enough land to 
assure both these things. 

The fact that our railroads are now awakening to the 
necessity of handling the tramp proves the necessity of 
the system, and the fact that in Switzerland the forced 
colonies have been made to pay their own expenses 
indicates its economy. Indeed, no proposed legislation 
illustrates so well the power driving us towards Socialism 
as the history of attempts at legislation in this direction 
in New York State. 

Twelve years ago a farm colony bill was drawn by a 
committee appointed by the charitable societies in New 
York; but it did not secure at Albany a moment's serious 
attention. We were told by our legislators that poverty 
is not a crime. When we answered that our bill did not 
make it a crime more than the penal code, but only 
purposed to substitute for the expensive and degenerating 
system of the misnamed workhouse, inexpensive and 
regenerating work on a state farm, and that the plan had 
operated effectually in Holland and Belgium for over a 
hundred years, we were told that the plan might do in 



266 WHAT SOCIALISM IS 






Holland, but would not do here. So in the archives of 
the French senate may still be read the report made by 
Thiers, when appointed by Louis Philippe on a committee 
to investigate the first railroad ever built, which concludes 
as follows : " Railroads may serve a purpose in England, 
but they are not suited to France." 

A similar bill, improved by borrowing from late ex- 
perience in Switzerland, drawn by a similar committee 
(to which was added the Commissioner of Charities, Mr. 
Hebberd) was presented at Albany at the session of 1909, 
and although not passed, was sufficiently well received to 
encourage the hope that it will pass at the session of 1910. 
It had the support of the great railroads in New York 
state; for the railroads have discovered that the tramp 
is an intolerable nuisance. 1 Colonel Pangborn of the 
Baltimore & Ohio has lately estimated that the damage 
occasioned by tramps to railroads in the United States 
amounts in a single year to twenty-five million dollars. 2 
For the tramp in America does not tramp; he rides on 
railroads; he sets fire to freight cars and freight stations; 
he obstructs the lines, wrecks trains, and is a fruitful 
cause of action for damages. The measure, therefore, 
which was thrown out by the Assembly when proposed 
from motives of humanity, may be passed as a measure 
of self-defence, and self-defence thus constitutes an ele- 
ment of the power always at work on the side of progress 
that neither ignorance nor interest will be able to resist. 

The reason for believing that the farm colony will 
perform an important function not only during the period 
which must elapse before the cooperative commonwealth, 
but also after the cooperative commonwealth has been 
attained, is that work on land seems to be the only work 

1 See Appendix, p. 429. 

2 Charities and the Commons, p. 342, June, 1907. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 267 

to which the unemployed and unemployables can be 
suitably put. 

Every day we seem to be increasing our capacity to 
make land productive. We not only make new dis- 
coveries, but profit by those of more ancient civilizations 
than our own. It has long been known that in the East 
they subject grain to the same system of replanting that 
truck gardeners do early vegetables. 1 

Dr. Fesca informs us that in Japan rice is treated in 
the same way: "It is allowed first to germinate; then 
it is sown in special warm corners, well inundated with 
water and protected from the birds by strings drawn over 
the ground. Thirty-five to fifty-five days later, the 
young plants, now fully developed and possessed of a 
thick network of rootlets, are replanted in the open 
ground. In this way the Japanese obtain from twenty 
to thirty-two bushels of dressed rice to the acre in the 
poor provinces, forty bushels in the better ones, and from 
sixty to sixty-seven bushels in the best lands. The 
average, in six rice-growing States of North America, is 
at the same time only nine and a half bushels. " 2 

Agriculturists are familiar with the results obtained 
by Major Hallett's growing what he called "pedigree 
cereals"; that is to say, by using as seed only the best 

1 Eugene Simon, " La cite* chinoise " (translated into English) ; 
Toubeau, "La repartition metrique des impots," 2 vols., Paris 
(Guillaumin), 1880, quoted by Kropotkin in " Fields, Factories and 
Workshops," p. 239. See Evolution and Effort, p. 168. 

% Dr. M. Fesea, " Beitrage zur Kenntniss der japanesischen Land- 
wirthschaft," Part II, p. 33 (Berlin, 1893). The economy in seeds 
is also considerable. While in Italy 250 kilogrammes to the 
hectare are sown, and 160 kilogrammes in South Carolina the 
Japanese use only sixty kilogrammes for the same area. (Semler, 
"Tropische Agrikultur," Bd. Ill, pp. 20-28. Quoted by Prince 
Kropotkin in "Fields, Factories and Workshops," p. 239. 



268 WHAT SOCIALISM IS 

ears in his crop; and by giving to each grain sufficient 
space he obtained sometimes as much as 2500 grains 
for one grain planted. Even better results were obtained 
by Grandeau. 1 

We are only beginning to know how much can be 
produced out of an acre of ground. One thing, however, 
is certain: where labor is cheap and land limited as in 
the case of our unemployed, there is no method known 
by which labor can produce better results than by putting 
it to what is called "intensive culture"; and as the secrets 
of intensive culture become more known, it becomes clear 
that if the state would only take the trouble to set aside 
a certain amount of land for the purpose, it could without 
further expense than that of the first installation make 
able-bodied unemployed and unemployables self-sup- 
porting. 

This is not a question of fertility; it is simply a question 
of space. Unfertile land is made fertile by intensive 
culture. It has been said that the Paris gardener defies 
the soil and the climate. Every truck gardener there 
stipulates in renting land that he "may carry away his 
soil down to a certain depth, when he quits his tenancy." 2 
In other words, soil is now a manufacture; we are no 
longer confined to fertile areas; we can make any area 
fertile by the application to it of industry and intelligence. 

Municipalities can contribute enormously to the fertility 
of the land around them. A district near Paris, called 
Genevilliers, was a few years ago a desert tract of sand. 
The city poured over this tract the sewage of the city 
after a filtration that deprived it of its offensive features. 

1 L. Grandeau, " Etudes Agronomiques," 3d series, 1887-8, p. 43. 
Quoted by Kropotkin, Ibid., 101. 

2 See Ponce, " La Culture maraiche," 1869. Barrel's " Diction- 
naire d' Agriculture." Quoted by Kropotkin, Ibid., p. 64. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 269 

This tract has become of fabulous fertility; but the 
municipality having failed to buy this land before this 
operation, the increased value of the land has accrued 
to the persons who happened to be the owners of it; 
whereas if the city had begun by purchasing the land at 
the price at which it could have been purchased before 
this operation, it would have had here a tract of enormous 
value that, by the farm colony system, would have greatly 
contributed to relieve the city of the burden of pauperism. 

It would seem as though the art of using manure were 
practically unknown in this country by the farmers. 
The results that can be obtained in this way are given 
in the Farmer's Bulletin, No. 242, where an intelligent 
use of manure resulted in crops of 6.7 tons of hay for 
every acre of cultivation; 1 and this not by the applica- 
tion of any extraordinary science, but simply by recog- 
nizing the obvious fact that manure must be spread daily 
and not allowed to lose most of its value from being 
piled into heaps, where it burns and degenerates. 2 

The farm colony must be so organized that it furnishes 
work summer and winter. As its name implies, the 
colony is not confined to work on land. Many skilled 
workmen would lose their skill if they were put to farm 
work. Swiss colonies, therefore, have a few industries 
established in each colony to which skilled workmen are 
put. This occupies unskilled inmates during the winter 

1 Very little land in New York State produces more than from 
two to three tons an acre, and most of it does not produce so 
much. 

2 It is impossible in this book to give to the question of soil fer- 
tility the scope which it needs in order to convince a layman of the 
almost unlimited extent to which good soil can be manufactured 
and made fertile. Those who are anxious to satisfy themselves on 
this subject are urged to read the books above quoted. 



270 WHAT SOCIALISM IS 

months when the weather is too inclement for out of door 
work, and also teaches them. Moreover, in a self- 
supporting farm colony there is work which can be done 
by the aged and the infirm, teaming, taking care of 
animals, plucking fruits and vegetables, preparing them 
for preserving, and all the small jobs that attend large 
housekeeping. 

The farm colony plan will in part relieve the state of 
the expense of old-age pensions. Every industry will 
provide pensions for its own workers and thus the state 
will be relieved by the guilds; but there will always be 
some aged left unsupported by such private industries 
as will continue to exist by the side of the guilds. Of 
these it may be expedient to relieve some in their own 
homes; but many will find in the free farm colony an 
abiding place more congenial to themselves than the 
almshouse, and far less expensive to the state. It will be 
more congenial because there will be no more disgrace 
attending a free farm colony than any other state em- 
ployment, and because it will be organized so as to render 
its work as agreeable as possible. It will never be so 
attractive as work outside the colony because it will be 
subject to the kind of regulations that attend all big 
institutions, so there is little fear of these colonies be- 
coming larger than is good for the community. But it 
will be a home rather than an almshouse, and it will be 
less expensive to the state because of the work which 
even the aged can do. 

The farm colony furnishes a system by means of which 
the state can compel the unwilling, able-bodied tramp 
and pauper to earn his own livelihood; where it can 
afford work to the unemployed without cost to the state; 
and can utilize to the utmost possible the services of 
those who are not able-bodied. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 271 

It must not be imagined that discipline of a harsh 
character is necessary. There are in every one of these 
colonies in Europe dark cells, where a man who will not 
work, or will not obey rules, is confined and kept on 
bread and water until he consents to w r ork and to obey 
rules; and the very fact of the existence of these cells, 
and of this system, has been found sufficient to secure 
good work and obedience to rules without using the dark 
cells except under exceptional circumstances. The di- 
rector of one of the Dutch colonies told me that he did 
not use the dark cell once a year. 

There is no reason why the farm colony system should 
not be extended to the treatment of all crime except 
that we ha^e prisons, prison managers, and a prison 
administration which stand in the way of radical prison 
reform; and the general stupidity which prefers the ills 
we have to the blessings which, obvious as they are, we 
have not imagination enough to comprehend. The folly 
of keeping an enormous population of criminals idle, 
within four walls, at an enormous expense to the com- 
munity, when we could keep them busy to their great 
advantage, physical, intellectual, and moral, without a 
penny of cost to the community, is one of those things 
which future generations will find it difficult to believe. 1 

In the cooperative commonwealth there will be no 
prisons, no penitentiaries, no almshouses, no tramps, 
no unemployed. There will be farm colonies of various 
grades, from those that have no discipline beyond that 
necessaiy to secure the observance of rules necessary to 
all institutional life, through those that have just enough 
discipline to keep lazy men at work, to those that have 
sufficient discipline to keep even criminals at work. For 
although it is obvious that under a cooperative common- 

1 " The Elimination of the Tramp," p. 51. 



272 WHAT SOCIALISM IS 

wealth in which there is no necessity for exhausting any 
individual, no necessity for alcoholism or stimulation, no 
anxiety regarding the means of existence; where there is 
throughout a high standard of living, ease for the mind 
and abundance for the body, the production of the natu- 
ral criminal ought to be immensely diminished, yet the 
occasional criminal will have to be provided for. 

For further study of the farm colony system as it has 
been developed in Switzerland, and as it might be applied 
in the United States under existing conditions, the reader 
is referred to "The Elimination of the Tramp. " * It is 
hoped, however, that enough has been said regarding 
these colonies to enable us to consider the immense role 
which an intelligent classification of farm colonies would 
play, not only under existing conditions, but in the future 
cooperative commonwealth. 

A single farm colony for dealing with tramps as pro- 
posed in the bill now before the Assembly of New York 
State would render an indispensable service by taking 
off the streets and highways the vagrants who, because 
they are now confounded with the unemployed, tend to 
confuse the mind of the public on this all-important 
subject. But although such a colony, organized under 
the same conditions as the forced labor colony in Switzer- 
land, would render this service without cost to the state 
beyond that of first installation, its usefulness in the 
problem of production at large would be extremely 
small. It would attain its purpose if it were self-sup- 
porting. But if this tramp colony proves a success, the 
same system could be applied not only to take care of all 
our dependent and criminal classes, but to play an 
important r61e in the production of the necessaries of life. 
There ought to be three distinct classes of colonies: 

1 Published by G. P. Putnam's Sons 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 273 

The criminal farm colony surrounded by walls where 
the strictest discipline would be enforced, and within 
which the inmates would be confined to intensive culti- 
vation, handicrafts, and some form of machine industry. 

The forced labor colony for misdemeanants and able- 
bodied vagrants and paupers where larger liberty would 
be enjoyed; and 

The free labor colony where there would be no regula- 
tion except that indispensable in all institutions. 

Perhaps to these should be added probationary colonies 
as described in the "Elimination of the Tramp," p. 59, 
for those as to whose willingness to work there is doubt. 
These would furnish the "test" so much sought by 
English Poor Law Guardians. From these probationary 
colonies the inmates would be graduated down to the 
forced labor colony, or up to the free. So also criminals 
would be prepared for social life by passing through the 
forced labor colony, and inmates of the forced labor 
colony prepared for social life by passing through the 
free labor colony. 

In a cooperative commonwealth free labor would have 
no objection to industrial work conducted within these 
colonies, because the less work there is to be done in any 
given industry, the less hours would the workers in that 
industry have to give to it. So that every industry 
carried on in the colony would by so much diminish the 
amount of goods produced outside by that industry, and 
to that extent relieve the free labor engaged therein. 
This great objection to penal labor being removed, the 
state will have an advantage in distributing the industries 
throughout its colonies according to geographical condi- 
tions. 

The criminal colonies will naturally be more industrial 
in their character than the agricultural, because they will 



274 WHAT SOCIALISM IS 

have to be operated within prison walls. They will 
nevertheless include truck gardening and horticulture. 1 
Penal colonies, therefore, will group themselves around 
great water power, which will be retained by the state 
and not dissipated by the gift of franchises to private 
corporations. 2 

Misdemeanants and tramps will preferably be set to 
work on large farms which, because of their size and 
remoteness from towns, will render escape difficult. The 
methods adopted in Switzerland for making escape 
difficult if not impossible, are fully described in the 
"Elimination of the Tramp." 3 

As in these colonies there is more or less work to be 
done all the year round, it would be indispensable to 
build in connection with them factories w^hich could be 
operated during the winter months, the state being 
careful to limit the factories to the production of things 
already socialized, so as not to compete injuriously with 
private industry. 

Free labor colonies ought to be located near large cen- 
ters of population, not only because of the character of 
the things they will produce, for example, milk, vegetables, 
and fruits, which need a market at the door, but also 
because it is in these great centers that pauperism and 
unemployment express themselves in largest figures and 
in greatest variation. In these colonies inmates will 
remain the shortest terms, and it is important, therefore, 
to have them in proximity to places where the inmates 
are likely to live in order to avoid the heavy expense of 
transportation. 

Free labor colonies will be engaged in the production 

1 See " Elimination of the Tramp," p. 45. 

2 See Hampton's Magazine for May and June, 1909. 

3 See p. 58. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 275 

of milk for two reasons: The hygienic importance of 
milk is so great that it should as much as possible be re- 
moved from the competitive field. It is important that 
milk should be produced as near as possible to the town 
where it is to be consumed. It is wiser, therefore, to 
assign the production of milk to the free labor colony, 
near the city, than to the penal or forced labor colony 
that would be comparatively remote. But it must not 
be imagined that the production of milk can be confided 
exclusively to such inexpert labor as that of the inmates 
of free labor colonies. The production of milk can only 
be entrusted to careful experts receiving a relatively 
high rate of wages. Free labor colonies, therefore, will 
have to be provided with a corps of men and women 
trained in the production of milk and dairy products. 

It may be suggested that the fact that dairy products 
must be entrusted to trained experts is a reason for not 
associating the production of milk with free labor col- 
onies. This objection disappears when account is taken 
of the fact that dairy farms should have connected with 
them such subsidiary products as chickens and pigs. 
Skimmed milk is of the greatest value in these subsidiary 
productions; so also is the garbage that would accumulate 
in such an institution as a farm colony. The care of 
pigs and poultry can be confided to defectives such as 
we are likely to find in a free labor colony. It furnishes 
work all the year round ; it enriches the soil rather than 
impoverishes it. 

Free labor colonies, therefore, will be engaged in the 
production of milk, pigs, poultry, vegetables, fruits, and 
flow T ers. They will be furnished with grain by the forced 
labor colonies in the States where grain can be cultivated 
on a large scale; and by distributing industries among 
the three classes of colonies and arranging for exchange of 



276 WHAT SOCIALISM IS 

products, the whole colony system ought not only to be 
self-supporting, but to produce more than the colonies 
can themselves consume. The disposition made of these 
products will be studied in connection with the problem 
of distribution. 

Under such a plan, no pauperism or even poverty will 
be tolerated in the towns. As soon as a man, woman, or 
family is incapable of self-support in the competitive 
field, or because of sickness or accident in the cooperative 
field, they will be taken out of the town where their 
presence is an expense and a nuisance not only to them- 
selves, but to the community, to a free farm colony where 
health can be restored and defectives put to the best use 
possible. 

Farm colonies in the Rocky Mountain region where 
sheep and cattle can be fed on public land for nine or 
ten months in the year, and fed by hand during the re- 
maining two or three months, will furnish cattle and 
sheep to municipal packing-houses that will distribute 
meat with the economy of the postoffice system from 
door to door. 

State farm colonies in the grain-growing districts will 
furnish grain to all the other colonies and wheat to 
municipal bakeries that will distribute bread with the 
economy of the postoffice system from door to 
door. 

Free labor colonies adjoining cities will produce milk, 
butter, and dairy products, pork and pork products, 
chickens, eggs, vegetables, fruits, and flowers and dis- 
tribute them with the economy of the postoffice system 
from door to door. 

State factories distributed amongst penal colonies in 
accordance with the geographical conditions that will 
make them most efficient, will furnish garments, shoes, 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 277 

hats, etc., to the other colonies at the cheapest possible 
price. 

By the side of these productions, there will be maintained 
exactly the same system of private ownership that exists 
to-day with all the virtues that emulation produces free 
from the fatal consequences that make failure result in 
misery, pauperism, prostitution, vagrancy, and crime. 
For so long as the individual prospers in his private 
enterprise, he will be encouraged to maintain it; whereas 
the moment he fails, he will come within the state system 
under which the private individual having proved his 
inability to support himself and his family under the 
competitive plan, will be shown how to support himself 
and his family by state institutions that will have re- 
duced this task to a science. 

That the state will occasionally fail in this task is to 
be expected. But what is the worst consequence that 
can result from failure? Nothing more than the main- 
tenance of the competitive system in every field of in- 
dustry where the state fails. If the state fails to furnish 
good bread, private initiative will take the baking of 
bread from the state and will keep it until the state suc- 
ceeds in furnishing bread to the taste of the public. If 
the state fails in furnishing garments, private initiative 
will keep garment making in its hands except in so far 
as the state makes garments for the inmates of its own 
institutions. 

Many problems connected with this system of pro- 
duction will occur to the mind of the intelligent reader. 
These problems, however, will be found to belong more 
strictly to the question of distribution and government 
control — two subjects that cannot be intelligently dis- 
cussed until the question of private property in land has 
been answered. 



278 WHAT SOCIALISM IS 



§ 5. Land 

Socialism was formerly defined as including state 
ownership of land. This idea is to-day, however, aban- 
doned in favor of a much more intelligent system: 

One principal difference between the Socialist and the 
Single Taxer is that the Single Taxer is opposed to state 
ownership of all land; and it is probable that the Single 
Taxer is more wise in this respect than the state Socialist. 
In the first place, the state Socialist who wants all land 
to be owned by the state ignores some very fundamental 
facts in human nature : He ignores the fact that humanity 
has for generations cultivated the instinct of ownership 
in land. There is nothing dearer in life to the French 
peasant than the strip of land barely sufficient to support 
life, and he will cling to that strip of land until some acci- 
dent has torn it from him and reduced him to the con- 
dition of a pauper. Out of this instinct of ownership 
springs the extraordinary industry of the farmer — an 
industry which is not excelled or equalled in any but 
sweated trades. 

The life of the peasant or small farmer is one of hard- 
ship that leaves no moment for leisure, and of monotony 
that populates our lunatic asylums. 1 Not only is the 
life of the farmer one of the hardest, but it is also one of 
the least secure. The failure of a single crop, the loss of 
a single horse, disease in a chicken yard, a violent hail- 
storm — any of these may oblige a farmer to put that first 
small mortgage on his farm which is the beginning of his 
ruin. Nevertheless, the farmer sticks to his farm and 
labors on it from the rising of the sun, through the glare 

1 The occupation that furnishes most inmates to our asylums is 
farming. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 279 

of noon and up to the last ray in the west, because the 
land is his own and he has for it the kind of affection that 
a mother has for her child — an affection that makes no 
sacrifice too great. It would seem unwise to deprive 
the farmer of the satisfaction of ownership and the com- 
munity of the industry and productivity which this 
sense of ownership results in. 

There is no conceivable advantage in depriving the 
farmer of the ownership of his farm. The farmer now 
pays taxes on his land. The right of the state to exact 
a tax puts the state in the position of a landlord except 
that the state calls the tribute it levies on the farm a 
"tax," whereas the owner calls this tribute "rent." Of 
course there is a great difference between the tax levied 
by the state and the rent paid by the farmer to the private 
owner, because the one is light and the other heavy. This 
is the material difference which must not be lost sight of 
in the discussion of the subject. Every farmer expects 
to pay taxes to the state and all he asks is that the tax 
be not an onerous one. It can be rendered less onerous 
in the cooperative commonwealth than to-day because 
a cooperative commonwealth will not exact payment of 
taxes in money, but will content itself with payment in 
produce. Instead of the state taking over the land and 
depriving the farmer of ownership, and exacting rent, the 
cooperative commonwealth will leave the ownership 
in the farmer and exact a tax in produce; and so long as 
this tax is paid, the farmer will remain the undisputed 
owner of his land, and will continue to give it that hourly 
care without which the best results can hardly be ob- 
tained. 

There is nothing in modern Socialism, therefore, to 
frighten the farmer. He cannot but benefit by it, for 
his taxes will be levied in produce instead of in cash; 



280 WHAT SOCIALISM IS 

and it is the conversion of farm produce into cash which 
is the farmer's main difficulty to-day, as was seen when 
money was discussed. 

The title of a farmer under a cooperative commonwealth 
will be much like that of the peasant in the Island of 
Jersey, who generally purchases his land on condition 
of paying a certain amount to the owner per annum. 
These Jersey titles are just as secure as freeholds in Eng- 
land or in this country, subject of course to the payment 
of the rent charged. 

The tax in produce, however, which the farmer is to pay 
the state will be far more just and fair. Land will be 
classified according to productivity, and the farmer will 
never be called upon to furnish the state with a larger 
proportion of his crop than he can afford. On the other 
hand, farmers will not be allowed to keep the ownership 
of land which they do not use. If it is to the benefit 
of the community that land be drained, the owner will 
be called upon to drain it within a definite period. If he 
does not drain it within that period, the state will take 
his undrained land from him. Nor will the farmer be 
allowed to cut down timber where the maintenance of 
the timber is deemed important to the commonwealth. 1 
He will be taught forestry and the propagation of deer, 
and shown how to produce as much income out of his 
timber as he would out of the land when cleared. Above 
all, he will be relieved from the exorbitant prices which 

1 This limitation on property has already been enacted in the 
State of New York (Chap. 463, Laws of 1909), and bills of similar 
import have been introduced into the legislatures of California, 
Maine, and Pennsylvania. In Maine a hypothetical question as 
to the constitutionality of such legislation was submitted to the 
supreme court, which reported favorably (19 Lawyers' Reports 
annotated [U. S.] 422). 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 281 

he now pays the trust for every article which he does not 
himself produce. The state will undertake the task of 
distribution, so that he can receive as the farmer in South 
Australia does to-day — a part payment in cash for all 
produce he delivers at the nearest railroad, and a sub- 
sequent payment when his goods have been sold through 
the instrumentality of the state. But this last belongs 
to Distribution. 

Prices will not be lowered by the competition of farm 
colonies. On the contrary, they will be maintained by 
the prices asked by farm colonies. Farm-colony prices 
will allow every efficient farmer a substantial living, and 
the farmer will have the benefit of the example and advice 
furnished him by the nearest farm colony, which will 
be a model farm. 

It may be objected that under this system the farmer 
will not have sufficient motive for adopting modern 
methods. There are undoubtedly farmers who are averse 
to the adoption of modern methods; but there are also 
thousands of farmers eager to know modern methods. 
Rev. J. D. Detrich, who produced 6.7 tons of hay for 
every acre in cultivation on his farm x was so pestered by 
neighbors who called to study his methods that he was 
obliged to remove to an adjoining State. Recalcitrant 
farmers will slowly be compelled to adopt modern meth- 
ods by the fixing of prices that will make modern 
methods indispensable to prosperity. 

In every way, therefore, the farmer will be benefited 
by the introduction of Socialism. He will keep the title 
of ownership in his farm that is dear to him; he will pay 
his taxes in produce instead of in cash; he will have the 
benefit of education and advice at his door; and he will 
be relieved of the exorbitant prices now demanded by 

1 Farmers' Bulletin, No. 242. 



282 WHAT SOCIALISM IS 

the trusts, and of that greatest of all his anxieties, the 
conversion of his produce into cash. 

As regards city land, the problem is a very different 
one, because the treatment of city land is an essential 
part of the whole municipal problem. 

Practically all municipal problems may be reduced to 
one — namely, crowding. As long as farmers live half a 
mile apart as they do on a standard 160-acre farm in the 
West, sewage and garbage are matters of individual 
rather than social interest. Provided the farmer does 
not pollute springs and water courses, he may dispose 
of his sewage and garbage as he chooses; but the moment 
men and women are crowded into cities on the vertical 
as well as on the horizontal plane, the disposal of sewage 
and garbage becomes of vital importance to the whole 
community. 

So also the maintenance of roads is a comparatively 
simple problem in the country, where traffic is light; 
whereas in the city, where traffic is great, the pavement 
of the streets presents problems not only of resistance, 
but of noise. The droppings of horses on the country 
road can be neglected; whereas those of horses passing a 
thousand per hour in a crowded city street create a dust 
injurious to health, and give rise to the problem of street 
cleaning. 

Again, where land is plentiful compared with popula- 
tion, the rent charged for land is small and often negli- 
gible; whereas where land is scarce compared with the 
population, as in the island of Manhattan, the rent 
becomes prohibitive for all except the wealthy, and 
workingmen are reduced to the alternative between 
living near their work in unwholesome tenements and 
living far from their work in less unwholesome conditions. 
And this scarcity of land gives rise to many problems of 



ECONOMIC COXSTRUCTlL COMMONWEALTH 2S3 

congested districts, of tuberculosis, sanitation, transpor- 
on, and of rent. 

If we look back on the whole history of our civilization, 
we shall see an unconscious struggle always going on 
between private interest and public spirit. The one 
tends to divide cities into two districts, one composed 
of the palaces of the rich, the other of the slums of the 
poor, and seeks :o conven every problem of municipal 
government into means of increasing private wealth. 
The other, on the contrary, we find manifested in the 

Age of Faith' 1 building cathedrals: in the Age of 
Beauty or Renaissance, building public squares and 
gardens; and in recent years taking such services as 
transportation out of the hands of private individuals 
and vesting them in the city. This struggle bet- 
public and private interest has been, up to the present 
time, unconscious or fitful. The Socialist asks that it 
should become conscious and progressive; that is all. 

Let us take a few concrete instances: I: was not until 
dark alleys were found to facilitate the work of criminals 
that municipalities were driven to light the streets; it 
was not until a district of Birmingham had become a 
menace to public welfare because its filth engendered 
both disease and crime that the municipal:: was driven 
to put an end to it; it was not until cholera began its 
ravages that municipalities were driven to provide dean 
dwellings; it was not until the evils attending imperfect 
transportation became intolerable tha: New York was 
driven to build subways ; if wafi n : I until fires devastated 
the city that New York organized its fire department; 
it was not until the filth of the streets was intolerable 
that the city took the cleaning of streets out of the hands 
of private contractors. L~p to the present time municipal 
activities have been forced into existence by the growth 



284 WHAT SOCIALISM IS 

of the evils to a point where they could no longer be 
endured. 

Over a century ago it was said that municipalities were 
" sores upon the body politic/' and this phrase has been 
solemnly quoted ever since as a sort of slogan of despair; 
whereas the municipality might be and ought to be, if 
intelligently administered, the mainspring of all our great 
national activities. The Socialist asks that, instead of 
waiting for evils to become intolerable before we attempt 
to cope with them and then adopting measures which, 
because they come late, are inadequate, we should take 
up municipal administration as a housekeeper takes hold 
of the administration of her house, adopting measures 
which we must inevitably in the end adopt before the 
evils become intolerable, and before the city becomes so 
over-built as to make the difficulty of coping with these 
evils insurmountable. 

This is the spirit in which a citizen should approach the 
question of city land; and if we do approach it in this 
spirit, the problem of how to put an end to the evils 
arising from private ownership of land is in many re- 
spects similar to those which present themselves in our 
effort to put an end to the evils of private ownership 
of stock. 

For example, some land will be in the hands of men 
who have contributed absolutely nothing to its value. 
They have inherited it, and upon the rent which con- 
ditions have enabled them to exact they have lived 
lives of uselessness if not of profligacy. One has abjured 
his American nationality to avoid the payment of the 
personal tax, and applies the sums which he receives, 
thanks to the industry of the community in New York, 
to the publishing of a conservative newspaper in London 
opposed to every effort permanently to improve the 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 285 

conditions of humanity there. Some land will be in the 
hands of men and women who have invested it in the 
economies of a laborious life and for whom it represents 
an old-age pension. Between these two, there is every 
degree of merit. 

The problem of compensation in taking over of city 
land will prove as complicated as in the socialization of 
industries, and very much the same principles will apply. 
Every city presents problems of its own, and it is difficult, 
therefore, to lay dow T n general principles applicable to 
all cities. But one point seems clear: We shall have to 
live in our cities while we are transforming them, and 
this means that the transformation will have to be slow. 
If the state undertakes to transform the slums into 
habitable tenements, the present families of the slums 
must be accommodated somewhere while the transfor- 
mation takes place. 

Rebuilding our cities to accommodate them to the 
changed conditions of a cooperative commonwealth, will 
be little more than doing on a large scale what Birming- 
ham did on a small scale when it converted its slums into 
Corporation Street. If it is to be done well, it must be 
preceded with the deliberate preparation indispensable 
to the success of every large undertaking. 

The Single Taxers are right when they claim that the 
enhancement of the value of land due to the industry of 
the many ought not to be appropriated by the idle few. 
The " unearned increment" should accrue to the whole 
community and not to a few landowners. As, therefore, 
the enhancement of the value of land due to crowding 
is a peculiar feature of the city, and distinguishes it from 
the country, it seems indispensable that city land should 
eventually be owned by the city; by the mass of citizens 
who labor and dwell therein. 



286 WHAT SOCIALISM IS 

Another thing seems clear, namely, that a city cannot 
be transformed to suit the needs of a cooperative common- 
wealth so long as the city is owned by a few individuals 
who, by virtue of their ownership, have a right to resist 
the transformation. 

The ownership in city land is, therefore, totally dif- 
ferent from ownership in farmland. In the latter case, 
there is no necessity for suppressing private ownership; 
whereas in the city, such suppression seems indispensable. 
It may be added that the beautiful parts of every city 
are due to state ownership. The Place des Vosges was 
built by Henry IV; the Place Vendome was built by 
Louis XIV; the Place de la Concorde was built by 
Louis XV; the Champs Ely sees and the Arc de l'Etoile 
were built by the two Napoleons. Practically all the 
great monuments of Paris were built by the state. Her 
streets were planned by the state, and the height of her 
private buildings regulated by the state. The same 
thing is true of London and Vienna. It is in our American 
cities alone that private initiative being allowed full sway, 
our buildings look like ill-assorted books in a neglected 
library; that we are committed to interminable streets and 
avenues which pass what monuments we have but lead 
up to none. In a word, our cities are committed to con- 
ditions so inartistic that the task of making them beautiful 
seems impossible short of destroying and rebuilding them 
altogether. 

§ 6. Summary of Productive Side of Economic Con- 
struction 

It will be seen that modern Socialism does not pro- 
pose to interfere with the private ownership of the farmer 
in his farm, and that the production of agricultural and 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 287 

dairy products will remain much in the same hands as at 
present, except that the state will have farm colonies to 
standardize production; to weed out those farmers who, 
because of their incapacity, are unable to produce what 
the land is capable of producing; and to furnish work 
not only for unsuccessful farmers, but for all who cannot 
earn a living in socialized industries or under competitive 
conditions. Such a condition of things will involve no 
redistribution of tasks. It will leave every man working 
in the industry in which he is; it will leave those who are 
engaged in competition still engaged in competition where 
it is not productive of injurious result. It will raise 
wages in all socialized industries, and raise the purchasing 
power of these industries by reducing prices; it will, 
therefore, raise the standard of life for the workingman, 
secure for him clean and wholesome habitations, and a 
possibility of maintaining a home in the best sense of the 
word, where our present civilization makes such a home 
impossible. By farm colonies it will make the exploi- 
tation of men, women, and children impossible. Children 
will not work at all until they have reached the fullest 
education of which they are capable; women will not be 
allowed in industrial work as long as they are bearing 
and rearing children; and men need never receive a 
sweated wage when they have state institutions where 
they can in exchange for their work, have board, lodging, 
and as much wage as they can in addition earn. There 
will be no criminal class, for no man need be driven to 
crime by want; and by the abolition of the criminal class 
and the criminal environment, it is probable that crime 
resulting from economic causes will tend to disappear. 
Nor will a woman be driven by need to prostitution. 
Every industry will provide compensation for its own 
superannuated and defectives, and the state will have 



288 WHAT SOCIALISM IS 

but few for whom to furnish old-age pensions. The 
community will be relieved, therefore, of the enormous 
burden of vagrancy, pauperism, prostitution, and crime; 
and all this without interfering with any competitive 
industry capable of supporting its workers up to the 
standard of life created by socialized industry, and with- 
out any such convulsion as will throw upon the state 
the dangerous problem of assigning tasks. 

We have heretofore considered only the problem of 
production; we have still to consider that of distribution. 

§ 7. Distribution. 

At the present time anarchy reigns over production 
and distribution. This anarchy has been in great part 
already replaced in the field of manufacture by the 
trust. By combination, or as Mr. Rockefeller says, "by 
cooperation" (Book II, Chapter III), all those engaged 
in the manufacture of the same thing have eliminated 
competition so as to obtain the advantages of production 
on a large scale. The cooperative commonwealth will 
avail itself of the work already done by the trust, and as 
has been already shown, will leave all these trusted in- 
dustries in the hands of those actually engaged in the 
work thereof. 

In the field of agricultural production, however, little 
has been done to diminish the anarchy of distribution. 1 

1 Something has been done in connection with the milk supply. 
Thus the milk producers of Boston have organized a union and have 
agreed to a price with the Milk Contractors' Association. But 
although this effort at combination has cheapened milk for large 
consumers such as hotels, large restaurants, and even small stores, 
pint customers pay just as much in Boston as elsewhere; that is, 
8 cents a quart. (Industrial Commission Report, Vol. VI, p. 409.) 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 289 

The anarchy which now characterizes distribution must 
be considered under two heads: competition in the field 
of transportation, and competition in the field of retail 
trade. America is unique among the nations of the world 
for insisting upon railroads being run on the competitive 
system. In Europe franchises are given to railroads with 
a view to public welfare and the distinct policy of avoid- 
ing competition. Capitals are adopted as railroad cen- 
ters and franchises so granted as to furnish a system of 
main lines radiating from these centers in such a manner 
as to compete w^ith one another the least possible. In 
America we have proceeded upon the plan that railroads 
are to compete just as traders do, and that it is by com- 
petition that rates are to be kept down. Railroads 
competing with one another between the same places 
are run at a social loss, the community is better served 
by one railroad run in the interests of the country than 
by two between the same points run in the interests of 
private individuals. 

As regards transportation then there seems to be no 
room for competition whatever. The state should own 
all systems of transportation with a view to bringing the 
produce of the country and of the factory to the consumer 
at the lowest possible cost to the community. 

Let us consider how a cooperative community will deal 
with competition in the retail trade. 

There is no reason why the private retailer conducting 
a business for his own account should not continue to 
exist side by side with a system of state distribution. 
There are reasons of propinquity and convenience that 
enable the small retailer to live to-day next door to the 
big department store. In the same way, the private 
retailer can perfectly well continue to live by the side of 
the state distributing system. Nevertheless, some parts 



290 WHAT SOCIALISM IS 

of retail trade will be taken over absolutely, for example, 
milk, for hygienic reasons. And other departments will 
be so completely in the hands of the state that so long 
as the state furnishes a good quality it will be improbable 
that private enterprise will find it useful to interfere; 
as for example, the baking of bread. 

As regards all those things which are likely to remain 
in the hands of individual enterprise, as, for example, 
things in which taste plays an important role — garments, 
hats, wallpaper, furniture, musical instruments, other 
instruments of pleasure such as athletic goods, bicycles, 
automobiles, steam launches, photographic apparatus — 
the retailing of these is likely to remain as much a matter 
of private enterprise as the production of them. 

As regards the necessaries of life the consumer should 
be able to get them at the lowest possible price. All things 
of a hygienic character, which it is of the utmost importance 
that the consumer should have of the purest quality, 
the state will undertake not only to transport, but to 
distribute in state stores. It is of course conceivable 
that in some towns the state store will not be conducted 
to the satisfaction of its citizens, and private enterprise 
will therefore run a store in that place better than the 
state. In such case, private enterprise ought to be en- 
couraged in its competition. But inasmuch as good 
state management will be in a cooperative commonwealth 
a matter of the greatest importance, it is not likely that 
the citizen will long endure bad administration. This 
belongs more to the political aspect of Socialism than to 
the economic, and will be studied there. We shall there- 
fore now pass to a brief consideration of just how this 
system of distribution will work. 

The state, having control of transportation, will adopt 
the method now prevailing in South Australia, and will 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 291 

pay the manufacturer and the farmer in cash at least 
50 per cent — if not more — of the value of his goods at the 
railroad station. These will then be transported by the 
state in conformity with the needs of the various villages, 
towns and cities to stores of its own. These will be run 
upon the cooperative plan; the goods sold at only a small 
margin above cost, this margin being kept to meet the 
expense of distribution; and the profits — if any — will 
be distributed at the end of the year amongst customers 
on the cooperative plan. 

It is obvious, however, that if the state is to distribute 
in the most economical manner, it must have some con- 
trol over production. It must not be called upon to 
transport and distribute more of any one thing than the 
public wants; nor must it be caught without enough to 
satisfy the needs of the consumer. This makes it in- 
dispensable to study the problem of control at the same 
time with the problem of distribution. 

No function of the state will probably be more important 
in a cooperative commonwealth than that of controlling 
the production of those things which, because they are 
necessaries or have hygienic importance, a cooperative 
commonwealth should itself control, transport, and 
distribute. 

The problem of control is not as difficult as it might at 
first seem. We know perfectly well to-day how much 
wheat, corn, beef, mutton, etc., are actually consumed 
by our population. All we have to do to determine this 
amount for ourselves is to take, for example, the amount 
of wheat produced in the country, and the amount ex- 
ported, subtract the exports from the product and deter- 
mine the amount consumed in this country. The same 
thing can be done practically with every staple product. 
The state, therefore, can determine every year in advance 



292 WHAT SOCIALISM IS 

how much of every staple product must be produced for 
the needs of the country. It will, of course, add to the 
amount actually needed a margin to provide for poor 
crops and other accidents. 

Let us consider how this control will be exercised as 
regards farm and dairy products. It has been already 
suggested that land should be classified according to 
geographical conditions, exposure, and soil. The pro- 
ductivity of the farm colonies will of course be known by 
the state. Every private farm will have its productivity 
roughly determined and every farmer will be expected 
to produce a minimum amount. Of the amount,he pro- 
duces, a part will be taken as taxes to furnish the govern- 
ment with the means to pay for administration. The 
rest will be paid for partly in gold and partly in orders 
on the state stores. The object of this system of payment 
is the following: 

It has been explained that taxes will be paid in prod- 
uce. This payment therefore needs no further comment. 
A minimum product ascribed to every farm will be paid 
for with orders on the state store. This represents the 
amount which the farmer must produce to keep his farm. 
It also represents the amount which the state must have 
to supply its citizens with food. All over and above this 
amount will be paid for in orders on the public store, or 
in cash, as the farmer shall elect; or, if the farmer 
chooses to dispose of this part to private traders he will 
be at liberty to do so. By this method the community 
will be furnished with produce belonging to three dif- 
ferent catagories : produce in the shape of a tax for which 
the farmer receives no compensation, this being prac- 
tically the rent he pays the state for his land; second, the 
minimum produce for which the farmer receives equivalent 
orders on the public store, this category being the pro- 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 293 

riuce upon which the community depends for its sus- 
tenance. 

The order upon the public store need differ in no way 
from the greenback of to-day except that, instead of 
entitling the holder to a dollar's worth of gold, it will 
entitle him to a dollar's worth of goods in the public store. 
Thus if wheat can be produced in a cooperative common- 
wealth at 50 cents per bushel, as seems likely, 1 the farmer 
will receive for every two bushels an order for one dollar 
on the public store. 

The third category which represents the surplus above 
what the farmer is required to produce in order to keep 
his farm, will constitute a surplus of production applicable 
to exchange for luxuries and foreign goods. This ex- 
change can be made directly by the farmer or by private 
banks and private merchants, or by the state. 

Let us consider the control the state must exercise 
over, and the role it must play in, the distribution of 
products of socialized industries such as oil, sugar, steel, 
iron, leather, etc. The amount of iron and steel re- 
quired by the nation in the course of a year is not as con- 
stant a quantity as the amount of wheat. It is, however, 
sufficiently constant to make it possible to establish a 
minimum. The state will begin by requiring socialized 
industries to furnish this minimum and determine the 
price to be paid for it, thus creating a stock on hand which 
can be accumulated so as to diminish the amount needed 
in subsequent years and furnish a reserve which can be 
called upon in case of extraordinary need. The state, 
having established the minimum of steel, sugar, oil, etc., 
which it needs, will require of the socialized industries 

1 See 13th Annual Report of the Bureau of Labor of U. S., p. 25, 
where the cost of producing wheat under the best conditions is 
approximately 30 cents per bushel. 



294 WHAT SOCIALISM IS 

to produce this minimum. It will also require them to 
produce, in addition, an amount necessary to contribute 
their share to the maintenance of the government. Every 
associated industry, therefore, will furnish at regular 
intervals the result of its manufacture in three categories 
similar to those already explained — a part for taxes; a 
minimum already referred to that will be paid for in 
orders on the public stores, and a surplus of which it 
can dispose either to the state or directly to foreign 
bankers and merchants. In this way, every associated 
industry will so adjust its manufacture as to produce these 
three categories; the proceeds of the surplus will be appli- 
cable in the first place to the support of workers through 
accidents, illness, and during old age; and the rest will 
be divided as profits amongst those engaged for example 
in the steel industry. These profits will be applicable 
to the purchase of luxuries either produced at home or 
produced abroad. 

Under this system the cooperative commonwealth 
will have goods to exchange with foreign countries and 
will to this extent be a merchant as regards all those 
things which it holds in excess of the needs of the com- 
munity, and as regards that surplus which it may pur- 
chase from the farmer and the socialized industries. 
This leaves room for a system of private banks and private 
enterprises in international trade; for the farmer and the 
socialized industries will be free to trade their surplus 
through the government or through private individuals 
as they may consider most to their profit. 

The distributive stores will present very much the same 
aspect as our department stores of to-day except that, 
though they may be even more gigantic in size, they are 
not likely to be as diverse; for a large proportion of the 
things now dealt in by department stores will doubtless 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 295 

remain in the hands of private industry. The essential 
duty of the state will be to provide its citizens with 
necessaries, not luxuries pertaining to taste and pleasure. 

The state store will be divided into two departments, 
retail and wholesale; not that a different price need 
necessarily be charged in the retail than in the wholesale 
department, but because the machinery for furnishing 
builders with bricks is different from that for furnishing 
housewives with groceries. The state stores will also 
have a system for the regular delivery from door to door 
of such necessaries of life as are daily or at stated intervals 
consumed, e.g., milk, bread, coal, ice, meat, vegetables, 
and fruit, thereby applying postoffice economies to the 
distribution of these things. 

The labor of distribution will be diminished by the 
slow transformation of city dwellings into gigantic apart- 
ment houses so constructed as to give the fullest supply 
of light and air to every room; and these apartment 
houses will have a distributing system of their own to 
the relief of the state. 

As regards alcoholic drinks, the state will undoubtedly 
undertake the production of these with a view to taking 
this industry as far as possible out of private hands. 
It will not be necessary, however, to take it entirely out 
of private hands provided all private production is 
subjected to vigorous control. But the distribution of 
alcoholic liquors will probably be monopolized by the 
state on the Gothenberg plan with, perhaps, the im- 
portant feature which characterizes the Public House 
Trust in England; that is, the persons in charge will 
receive a salary and an additional commission upon the 
sale of non-alcoholic drinks, but no commission on the 
sale of alcoholic drinks; and this with a view to giving 
the persons in charge an interest in selling non-alcoholic 



296 WHAT SOCIALISM IS 

drinks. Under these circumstances, there will be no 
temptation to encourage drunkenness and the rule of not 
giving alcoholic drinks to persons already under the 
influence of liquor will be complied with. 

It will be possible under such a general system for the 
state to serve as a medium for an exchange of labor that 
will greatly enhance the pleasure of life. Under existing 
conditions, the factory works summer as well as winter 
despite the fact that temperature makes work during the 
summer irksome and dangerous to health and life; and 
at the very time that the population is debilitated by 
being called upon to work in factories during the heat 
of June, July, and August, the farmer is in despair be- 
cause he cannot find help to take in his harvest. Once 
industries are associated so that they have a definite 
knowledge of how much they have to produce, there is no 
reason why they should not so adjust the work of the 
factory as to keep it open during the eight cool months 
of the year, leaving the factory hands free to help the 
farmer in the country during the four hot months. The 
same thing holds good with the farmer who, during the 
short cold days of winter, has little to do on the farm 
and can, therefore, to his advantage as well as to the 
advantage of the community, devote those months to 
factory work. There need be nothing compulsory about 
this exchange, for socialized industry is master of its own 
time and can distribute its work throughout the year 
as it chooses. But the fact that the state is possessed 
of the knowledge how much is to be produced by every 
factory and how much by every farmer — how many 
men are needed in the winter in every factory and how 
many men in the summer on every farm, will enable the 
state to serve as a medium through which the factory 
hand can arrange to work on the farm during the summer 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 297 

and the farmer can arrange to work in the factory in the 
winter, if they respectively desire to do so. 

It does not follow that the farmer is to be compelled 
to work long hours in the summer in the field and also 
in the factory during the winter; or the factory hand to 
give up his holiday in order to work on the farm during 
the summer. It has been shown that all the necessaries 
of life can probably be produced, even at the present 
time, by the adults in the community though they work 
no more than two hours and a half a day. If this be 
so, it would be easy so to adjust the work as to enable 
those who desire it to work more hours in the day and 
become entitled to so much longer vacation. The fore- 
going is only intended to show that in addition to the 
vacation which can be thus enjoyed, the farmer can relieve 
the monotonous existence of the farm during the winter 
months by work in the factory, and the factory hand can 
escape from factory conditions during the summer to his 
own advantage and to the advantage of the community 
at large. 

Another object we have in view is to put an end to the 
anarchy which exists in all that part of our industry 
which has not been concentrated into trusts — the anarchy 
under which some things are produced in greater quantities 
than are needed, and some things needed are not produced 
in sufficient quantities — under which no producer can tell 
whether he is producing enough of a thing until the time 
for profiting by the knowledge has passed; no producer 
can tell whether he is producing too much of a thing 
until he is injured and even ruined by the discovery. 
It is, I think, obvious that all these objects are obtained 
by concentrating industry after the fashion of trusts in 
the hands of the men actually engaged in the process of 
production; by producing things not to make profit but 



298 WHAT SOCIALISM IS 

to satisfy needs; and in the quantities which we know 
to be needed and not in quantities determined by the 
desire of the producer to make large profits checked only 
by the bankruptcy that attends production in larger 
quantities than the market will take. 

Thus, the state orders thirty million tons of iron ore 
because we know that this amount of iron ore has served 
the needs of the country during a period of great activity, 
and will furnish not only all we can use ourselves in that 
year, but all that we can dispose of abroad. These 
thirty million tons represent then the maximum that we 
can usefully manufacture; and we can safely order thirty 
million tons because the state is not under the necessity 
to sell this iron to get gold with which to pay wages, 
rent, coal, and the running expenses of the factory. In a 
cooperative commonwealth there will be no rent to pay. 
The coal will be paid for in exactly the same way as the 
iron, by the issue of store orders. 

The workers will get as nearly as possible the exact 
product of their work. There will be no capitalist who 
will take from them what the capitalist now takes, that 
is, about one-half of their earnings. Nor will those doing 
a low order of work receive as much as those doing a high 
order of work; every man will be paid according to his 
capacity; for we begin by assuming that the distribution 
of work according to capacity to-day is not far wrong, and 
so every man engaged in the steel industry will continue 
to receive the same wages as he received before with a 
certain prospect of an additional wage in the shape of 
profit, representing the difference in wage between the 
new conditions and the old. 

Overwork will be impossible in the iron trade, because 
a sufficient number will be employed to prevent overwork. 
And unemployment will be impossible because if, at any 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 299 

period, it turns out that more iron is being produced 
than the community can use, the excess men employed 
in the previous year will be set to work by the state in 
some other industry. 

The effect of such a discovery will be to diminish the 
number of hours required all round. It must not be for- 
gotten how little work need actually be done to produce 
the things we need. Under these circumstances, we need 
hardly consider the question of overwork, for all will 
enjoy ample leisure. The hours of labor will not diminish 
in a great degree in the first year that an industry is taken 
over, for during the transition period, experience must be 
given time to demonstrate the extent to which hours of 
labor can be reduced. 

And as regards unemployment, even though there 
be no industry in which, for instance, the surplus workers 
of the iron trade can be usefully employed, there will 
always be farm colonies where their labor can be self- 
supporting. 

Another beneficial consequence of this system is that 
if, as is likely, it turns out that thirty million tons of iron 
are more than we can use, the state will not be obliged 
to dump the excess upon European markets as do now 
the trusts, 1 thereby incurring a heavy loss to the home 
industry and arousing the animosity of the European 
industry affected thereby. 

Again, no financial panic can hurt the iron industry. 
The bankers may gamble to their heart's desire. If 
they withhold gold the worst they can do is to injure 
those engaged in competitive industry. No withholding 
of gold can affect an industry which produces for use and 
not for profit and receives weekly the wages of its em- 
ployees in a currency which, because it is not gold or 

1 Book II, Chapter II. 



300 WHAT SOCIALISM IS 

based upon gold and not, therefore, within the control 
of the banker or the financier, escapes entirely the evil 
effects of financial operations. Nor can such an industry 
be affected by what are called " industrial panics "; for 
industrial panics are the result of overproduction — 
of the anarchy that exists under the competitive system. 
These panics may affect competitive industries, but can- 
not affect guild industries built on yearly state orders 
for definite amounts calculated beforehand from the 
known needs of the community, and not left as now to 
the anarchy and accidents of the market. 

Neither financial nor industrial panics can ever have 
the terrible consequences in a cooperative commonwealth 
that they have under existing conditions, because in a 
cooperative commonwealth all the necessaries and most 
of the comforts of life will be produced upon the co- 
operative plan, and therefore, a financial or industrial 
panic can only affect that part of industry which proceeds 
under the competitive system and as regards, for the most 
part, luxuries and not necessaries of life. 

Obviously, the system of store orders cannot be ap- 
plied upon the first transfer of an industry from the hands 
of the capitalist to those of the guild. For a time gold 
will have to be used until the transformation from cap- 
italism to cooperation has been sufficiently extended to 
put the state in a position to open public stores. There 
need, however, be no anxiety as to the state not being in 
possession of enough gold to handle this part of the 
business, because it will obviously be the first duty of the 
cooperative commonwealth to expropriate the mines and 
put itself in possession of the gold necessary to carry on 
financial operations with the guilds until such time as 
the public stores can be usefully opened. Moreover, 
in taking over the gold mines, the state will also take over 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 301 

the iron mines; and iron ore will be furnished to the iron 
guild under conditions that will make the necessity of 
the use of gold far smaller than it would be if the iron ore 
remained in private hands and had to be paid for in 
gold. The state will only have to pay gold representing 
the labor cost of extracting the ore, and will not have to 
pay miners' profits. 

Under this system, there is no temptation to mine more 
ore or to cut down more forests than is absolutely nec- 
essary for the needs of the community. When every 
member in the community is educated to understand that 
waste means more work for himself and that the saving 
of waste means less work for himself, every man in the 
community will have a direct personal interest in dis- 
couraging waste and promoting economy. 

Obviously, too, industry will be conducted at its max- 
imum efficiency. Instead of being slaves of the market, 
we shall become its master. We shall have only so many 
factories running as are necessary to produce the things 
we need. Every factory will be running at maximum 
capacity, at maximum efficiency. 

It will be observed that it is proposed to pay the same 
price for pig iron after taking over the industry as was 
paid under competitive conditions at the time of the 
transfer. The objection may be made that this is ob- 
viously improper; that it is not fair to the workers in 
other industries to pay what is known to be an excessive 
price to the workers in pig iron. To this it may be 
answered that it will always be better to apply a regular 
rule than to leave questions of this kind to arbitrary 
administrative action. Besides, the rule that on taking 
over a new industry the price paid for the production 
of the first year shall be the price ruling at that time, will 
eventually put all industries upon the same footing. At 



302 WHAT SOCIALISM IS 

the excessive prices now ruling, the workers will during 
the first year get a larger proportion than they will ulti- 
mately be entitled to; but the larger proportion they will 
get this year will be needed to face the initial expenses 
of a higher standard of life. 

But here comes the most serious objection that can 
be made to this plan. It has been said that these prices 
will have to be revised; that if those manufacturing 
cotton thread believe themselves to be receiving less for 
the work they accomplish in their industry than those 
engaged in making pig iron, they will insist on revision; 
if so, there will be continual altercations between in- 
dustries as to the price to be paid for their goods and as 
to the share in this price that each is to receive; and the 
problem arises, who is to settle these innumerable ques- 
tions? 

This difficulty is the one that tends to make communists 
of us. It would be easy to wave away this difficulty by 
providing that the total profits be divided equally 
amongst all the members of the community. Humanity, 
however, is not prepared for such a system. Generations 
of selfishness have so determined the minds of those who 
are likely to have to decide these questions in a coopera- 
tive commonwealth, that the idea of paying the man at 
the head of the iron guild the same wages as the man who 
puddles, will seem too preposterous to be entertained. 
Whether man will ever develop to a point of unselfishness 
that will enable him to entertain this idea is a matter of 
speculation. Suffice it to recognize that if Socialism is to 
come within one hundred years, and if we take into ac- 
count the attitude of the public mind as it is to-day, and 
the slowness with which the public mind changes in 
matters so radical as these, we shall have to recognize 
that Communism is still beyond the range of practical 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 303 

politics; and we shall have to face the problem how the 
questions of the price of goods and the remuneration of 
the individual are to be solved. 



§ 8. Remuneration 

It has been pointed out that the proportion at present 
received by the various grades of workers in an industry, 
from the man who manages the whole industry to those 
who do the least skilled work, will at first be maintained. 
It may be that the salaries paid to managers at present 
rates may seem so exorbitant * — so out of all proportion 
to those paid to others — that there will be an outcry 
against it, leading to a diminution of these salaries. For 
present high salaries to managers are due to the extraor- 
dinary difficulty of handling industry under competitive 
conditions — difficulties that will in great part disappear 
when cooperative conditions are substituted for com- 
petitive conditions. With the exception of these highest 
salaries, probably the wisest rule will be to maintain at 
first the proportion that exists at the time when the in- 
dustry is taken over. Taking over these industries will 
at once raise the salaries of all because they will receive 
the share of the profits which now comes to the capitalist, 
after the deduction of sums paid to annuitants. Never- 
theless, it cannot be expected that the proportion now 
existing will be indefinitely maintained. 

The cost of management under competitive conditions 
is far higher than it would be under cooperative. A 
railroad man once pointed out to me that the cooperative 

1 For example, it is generally believed that the President of the 
Steel Trust gets over $100,000 a year. Before the insurance in- 
vestigation presidents of life insurance companies got similar 
salaries. Railroad presidents are also paid at similar rates. 



304 WHAT SOCIALISM IS 

system is impossible because it would be impossible for 
the government to find men capable of handling railroads 
at the price habitually paid by the government for such 
services. He pointed out that genius is necessary to 
handle railroads, — the genius of such men as J. J. Hill 
and the late E. H. Harriman. When, however, it was 
explained to him that the reason w T hy it was necessary 
to have such men as Harriman and Hill run our railroads 
was the competition between them, and when he was 
asked whether it would be necessary to have such men 
if our railroads were run as our postoffice is run, he 
admitted that under such conditions nine-tenths of the 
difficulty of management would be eliminated. 

Obviously, therefore, the enormous salaries paid to 
men at the head of trusts, life insurance companies, and 
railroad systems, would no longer be earned, and of 
course they would no longer be paid. 

What is true regarding the heads of these industries is 
true throughout a large part of the administration. It 
would need less of the faculty which characterizes the 
larger carnivora and more of the faculties which char- 
acterize the beaver and the ant. For these humbler 
services lower wages would be paid. This does not mean, 
however, that there will not be in the state room for men 
of the constructive ability of Harriman and Hill; but 
these men will not be the servants of our industries, 
they will be the servants of our state; and the genius 
that is now absorbed by business, will, in a cooperative 
commonwealth, be more usefully employed in the larger 
fields of politics. 

After this slight digression, let us return to the question 
how far the remuneration will be subject to revision. 

It may be that the lower grades will not be subject 
to revision at all; that all the iron ore we need can be 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 305 

produced by working four hours a day during eight 
months of the year, and that the rate of wages earned 
upon the old scale increased by the profits to which 
workers will be entitled will, without changing the pro- 
portion, furnish a standard of comfort such as to-day it is 
difficult to foresee. It is probable, however, that work- 
ingmen who are to-day members of the Socialist party 
will not agree with this prognosis, but will insist that in 
a cooperative commonwealth the whole scheme of re- 
muneration will have to be revised. If this be so, it is 
useless to deny that the revision of this rate of wages will 
be a matter of difficulty and that the difficulties arising 
will tend to be perpetual. 

Obviously, there must be some plan devised under 
which these matters will be better adjusted than by a 
government board, as has been suggested by certain 
Socialists. Mr. Hillquit x quotes with approval the words 
of Kautsky that government in a cooperative common- 
wealth will change in character, and that the state will 
no longer govern, but administer, and this is to a large 
degree true. But if the administration is to determine 
what every man is to receive as compensation for the 
work he does, it is clear that matters of such vital im- 
portance cannot be referred to the arbitrary action of a 
board of administrators. 

It seems to me that it will be indispensable to submit 
these matters to an industrial parliament in which every 
industry will be represented. And as the determination 
of these questions will be a matter of the greatest im- 
portance to every individual, it is probable that these 
parliaments will have to be bicameral for the same 
reason that our government is bicameral; for the same 
difficulty will present itself. New York insists upon 

1 "Socialism in Theory and Practice," p. 133. 



306 WHAT SOCIALISM IS 

having its large population represented in Congress. 
Rhode Island, on the other hand, in spite of its small 
size, insists upon having its state sovereignty represented; 
so New York is given a representation in proportion to 
its population in the Lower House and Rhode Island is 
given equal representation in the Upper House. Ex- 
actly the same situation will present itself it regard to 
industries: Certain industries will be enormous and will 
want to be represented in proportion to their size; for 
example, the steel industry. Others will be much smaller 
but perhaps of much greater importance; for example, 
the engineers. They will want to be fairly represented 
in spite of their small size and I see no way of adjusting 
this other than by adopting an industrial parliament 
of two chambers, in one of which representation will be ac- 
cording to numbers, while in the other every industry 
will be equally represented irrespective of size. This 
may seem a cumbersome system, but it will take no more 
time than the administration of the trade union takes 
to-day, and will not be half as costly; for the trade union 
of to-day has to accumulate funds to provide for unem- 
ployment, old age, sickness, and strikes. Strikes and 
unemployment it will not be necessary to provide against 
and the others will be provided for by every guild for 
their own members. The question, therefore, of the ad- 
justment of price and wages will occupy far less time 
than is now occupied by federations of trade unions. 

It is probable that the conclusions to which the in- 
dustrial parliament will come will not be final. It will 
be deemed wise to refer them for execution to the general 
government. This matter, however, belongs to the 
chapter on the political aspect of Socialism. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 307 



§ 9. Circulating Medium under Socialism 

It may not be clear at first sight why it is proposed to 
substitute store checks for greenbacks or gold. Early 
Socialist writers — particularly Rodbertus — attached much 
importance to the elimination of gold and the substitution 
therefor of what they called " labor checks"; a currency 
representing time spent in labor. Modern Socialist 
writers have been disposed to cast aside all efforts to 
substitute this kind of currency for gold. Mr. Hillquit 
quotes Kautsky * with approval on this subject: 

"'Money/ says Kautsky, 'is the simplest means 
known up to the present time which makes it possible 
in as complicated a mechanism as that of the modern 
productive process, with its tremendous far-reaching 
division of labor, to secure the circulation of products and 
their distribution to the individual members of society. 
It is the means which makes it possible for each one to 
satisfy his necessities according to his individual inclina- 
tion (to be sure within the bounds of his economic power) . 
As a means to such circulation, money will be found 
indispensable until something better is discovered.' " 2 

Upon this point I find myself at variance with modern 
Socialists. In Book II, Chapter VI, on Money, I have 
endeavored to show how the use of gold for currency puts 
those who own and handle gold in a position practically to 
control the entire country. If I have failed in proving 
this, there will be no occasion for substituting anything 
for gold. But if I have failed, it is, I think, my fault; 
or perhaps Socialist writers on this subject have not had, 
and do not possess, the intimate knowledge of financial 

1 " Socialism in Theory and Practice," p. 119. 

2 Karl Kautsky, "The Social Revolution/' p. 129. 



308 \ WHAT SOCIALISM IS 

affairs indispensable to an understanding of this subject. 
If Mr. Kautsky had practiced law in America, and had 
had American financiers for his clients, he would not, I 
think, have failed to understand that money is still more 
to-day what it always has been since the beginning of the 
civilized world — the "root of all evil/' By money, I 
mean not currency, which is indispensable, but the use 
of precious metals as the sole fundamental medium of 
exchange; because the amount of such precious metals 
being limited, the few, who under competitive conditions 
contrive to get control of these metals, become by virtue 
of this control masters not only of our economic, but of our 
political conditions. 

Mr. Hillquit says x that the principal economic classes 
and interest groups are represented by separate and well- 
defined political parties; and that the "only exception 
seems to be presented by the money-lending group of 
capitalists, who, as a rule, do not form parties of their 
own. This, however, may perhaps be accounted for by 
the function of money capital, which can become opera- 
tive only in connection with the other forms of capitalistic 
ownership, but has no independent productive existence. " 

It is misleading to endeavor to draw conclusions from 
political groups which characterize politics in Germany 
and France, and there is, I think, a better reason why 
the great "money-lending group of capitalists" or finan- 
ciers do not form parties of their own. 

Mr. Hillquit is doubtless right in saying that the 
" Republican party is substantially the party of the mod- 
ern capitalists," "while the Democratic party is largely 
the party of the middle class " ; nevertheless, in America, 
as in Europe, the so-called interests and capitalists belong 
to no one party, because they must and do control both. 

1 "Socialism in Theory and Practice," p. 164. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 309 

And it is because Socialist writers do not seem to be aware 
of the extent to which they do control politics, that 
comparatively little interest is taken by these writers in 
questions of currency. 

No one who lived in Europe during the Boer war is 
ignorant of the immense desire of both France and 
Germany to intervene on behalf of the Boers, and they 
certainly would have intervened not only because it 
afforded them a good opportunity to crush England, 
which one of them openly and the other less openly 
desired to do, but because such a war would have been 
popular with the masses in both countries. One thing 
alone prevented this: Financiers in France and Germany 
were heavily interested in African gold mines and it 
was their influence that turned the scale against the 
crushing of England at that time. 

In America, the revelations of the life insurance in- 
vestigation told all the world what Wall Street previously 
knew: that big corporations contribute to both Republican 
and Democratic parties and practically control the action 
of the Democratic side of our legislatures as well as the 
Republican. Nothing could have been more transparent 
than the influence of financiers in the decision whether 
Cannon and the rules that make Cannon supreme in 
Congress were to be maintained. The Wall Street Group, 
which had a lobby in Washington, appealed to the 
Republican majority not to disorganize their party by 
fighting against Cannon personally, promising that the 
Republican party would alter the rules that gave him 
his present autocratic power; and when in compliance 
with this promise, Cannon was reelected and the rules 
came up, the same lobby secured enough Democratic 
votes to maintain the rules in spite of the adverse votes 
of the insurgent Republicans, the argument then used 



310 WHAT SOCIALISM IS 

being that the tariff bill could not be passed unless the 
rules were maintained. 

Again, after Taft had, on three separate occasions, 
solemnly promised the people, if he were elected, a re- 
vision downward of the tariff, the same lobby secured a 
revision of the tariff upwards. We are assured by Messrs. 
Aldrich and Payne that the revision is a revision down- 
ward. How, then, will they explain the extraordinary 
haste with which ships sought to reach this port before 
the new tariff came into effect? x Were these ships hurry- 
ing to port in order to escape the payment of a low tariff? 
It may be answered that although the tariff was raised 
as regards certain articles, it was lowered as regards 
others. To this I have but to quote the Reviews of Re- 
views for September, 1909, and the articles entitled, "The 
Payne-Aldrich Tariff," which follow in subsequent num- 
bers. The Review of Reviews is quoted rather than other 
periodicals because it is recognized as a supporter of the 
so-called Roosevelt policies and, therefore, cannot be 
accused of Socialistic tendencies. It is seldom that the 
Interests have gone so far as to elect a presidential 
candidate on a definite promise and deliberately, as soon 
as the candidate was elected, to violate their promise. But 
the Interests have at this moment such control over our 
politics that they can even do this; and it seems very 
doubtful whether this treachery will ever be materially 
punished. 

If, as I believe, it is important that the competitive 
system be allowed to survive in the cooperative common- 
wealth, it is obvious that it can only be tolerated on the 
condition that the community be safe from such political 

1 See any daily newspaper between March 16, 1909, when the 
bill was introduced in the House, and Aug. 6, 1909, when the law 
went into effect. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 311 

control as this. And for this reason it seems to me essen- 
tial that the use of gold as currency be limited ; and that 
as regards the exchange of all the necessaries of our 
existence, we should have a currency that entirely escapes 
the control of the financier. This is the reason why I 
have insisted on the use of store checks which are just 
as convenient and secure as our present greenbacks. 

There seems to be no other way of eliminating the 
undemocratic autocracy of the financier than by some 
such system as the one above described; that is to say, 
the issue by the state of orders on the public stores to the 
extent of the goods in the public stores, which may in 
their general appearance differ but little from the green- 
back of to-day: Instead of reading "Good for $1.00 gold 
currency," they will read "Good for $1.00 at the public 
stores." This public store currency will eliminate the 
use of gold and silver throughout the socialized industries 
and as regards all agricultural products except a very 
small portion. Every socialized industry and every 
farmer will furnish to the state the bulk of his produce — 
that is, the minimum exacted by the state — in exchange 
for this kind of currency. 1 It is only the surplus — the 
amount produced by the farmer and factory above the 
minimum established by the state — that the farmer and 
the factory will be at liberty to sell for gold instead of 
exchanging for public store notes; and of this surplus 
the farmer and factory will be free to sell as much as they 
choose for public store notes, so that gold and silver will 
constitute a small part of the medium of exchange. This 
system will have the following advantages: 

1 Obviously, until all the industries are socialized, a part of this 
minimum will have to be paid in gold. When, however, all the 
industries are socialized, the whole of the minimum will be paid 
in store checks. 



312 WHAT SOCIALISM IS 

It will practically eliminate the present control of 
political and economic conditions by financiers. So 
long as the currency used in exchanging necessaries and 
comforts is rescued from the control of financiers, it is 
a matter of comparative indifference whether the financiers 
control the currency used in the manufacture and dis- 
tribution of luxuries, for such control will have practically 
no effect upon the things necessary to human existence. 

It will give to the state the use of the gold coin which 
is now accumulated in its treasury for the redemption 
of its notes; and the state will use this large gold fund 
for the purchase of the products of other nations. 1 

Let us see how this proposed system of store notes will 
work in a given manufacture : 

The state will order the steel guild to manufacture 
thirty million tons of pig iron (the amount produced in 
1907 was a little over twenty-six millions) ; and will allot 
to the steel guild for the supply of steel six hundred and 
and sixty million dollars in store notes, this being calcu- 
lated at the rate of $20 a ton. (The price in 1907 was a 
little over $22.) These $660,000,000 will be paid to be 
steel guild in the following manner: 

Every week a number of store orders will be issued to 
the amount of the wages of the week and of the fixed 
charges. At stipulated periods the steel guild will furnish 
the state pig iron so that the state will never have ad- 
vanced to the guild store orders amounting to more than 
the value of the pig iron in the store, an exception of 
course being made for the first few weeks that the in- 
dustry proceeds upon this basis. Upon the delivery of 
pig iron at these stated periods, the state will deliver the 
difference between the weekly amounts already paid and 
the price of the pig iron delivered. If deliveries of pig 

1 See Appendix, p. 431. 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 313 

iron can be made once a month, this will enable a reparti- 
tion of a part of the profits so that the workers will not 
have to wait until the end of the year before they receive 
their profits, the final dividend being paid at the expira- 
tion of each year. 

Such an order as the above will serve the following 
purposes and have the following consequences: the steel 
guild will have a definite order for a definite amount of 
pig iron to manufacture. It will know exactly how many 
men it will need to manufacture this pig iron. It will 
employ a few more men than those employed in 1910. 
The state will issue to the steel guild weekly the amount 
of store notes necessary to pay the wages upon the same 
scale as in 1910. Men engaged in the Steel Trust at the 
moment of transference will continue to work and receive 
the same rate of wages; but they will be entitled to their 
share of the profits after the amounts due annuitants 
and the amounts necessary to create a fund for old age 
and sickness have been deducted. Obviously, this first 
order of thirty million tons is far larger than the country 
uses, because a large part of the product of 1907 was ex- 
ported. The amount thus exported will be at the dis- 
posal of the state either to export, or exchange for foreign 
products, or to set aside as a reserve upon which the state 
can draw in case of deficit. 

§ 10. Summary 

Let us now consider the purposes we have in view in this 
proposed economic organization of the cooperative 
commonwealth and how far we attain these purposes: 

The main object of a cooperative commonwealth is to 
give to all workers as nearly as possible the exact product 
of their work. It may be interesting to note that this is 



314 WHAT SOCIALISM IS 

the ideal that Mr. Roosevelt himself proposes, and he 
objects to Socialism because he thinks Socialism will on 
the contrary allow the "thriftless and the vicious" to 
profit. These words describe not a cooperative common- 
wealth, but existing conditions. For example, such a 
degenerate as Harry Thaw, who would, I suppose, accord- 
ing to Mr. Roosevelt be classified as one of the " thriftless 
and vicious/' obtains his income from the profit created 
by others who work for it; whereas those who work, in- 
stead of getting the full product of their work, are obliged 
to see that nearly if not altogether one-half of it goes to 
the support of the idle, among them this young man. 
These are the exact conditions to which Socialism pro- 
poses to put an end, and, therefore, I point out that the 
principal object that Socialism has in view is to do exactly 
the thing that Mr. Roosevelt wants to see done — to undo 
the very things to which Mr. Roosevelt objects. 

Another principal object of this proposed organiza- 
tion is to prevent overwork and unemployment, that 
necessarily lead to drunkenness, pauperism, prostitution, 
and crime. 

A third thing which this system of organization pro- 
poses to do is to preserve the resources of the country; 
and here again we find ourselves realizing the ideal of 
Mr. Roosevelt. The single idea of a lumberman is to 
sell lumber — not to preserve it; the idea of a coal miner 
is to sell coal — not to preserve it; the idea of an iron 
miner is to sell ore — not to preserve it. In a cooperative 
commonwealth there is no desire to make profit out of 
these things. The one object in view is to use our lum- 
ber, coal, and ore to the best advantage and with the least 
waste. 

Another object we have in view is to produce with the 
greatest economy, with the greatest efficiency. We do 



/ 



ECONOMIC CONSTRUCTION OF COMMONWEALTH 315 

not want forty refiners engaged in refining sugar where 
seven will suffice. 1 We want all our factories while 
they are working, to be working at their best efficiency, 
not on half time or with only one-half the engines going. 
We also want the things we need to be produced in such 
a way as to take advantage of every waste product — a 
thing that can only be done when industry is concen- 
trated in the hands of a single guild instead of being 
distributed as it tended to be (before the organization of 
trusts) in the hands of many competing manufacturers. 

This system of production and distribution would 
maintain the present check upon overpopulation which 
Mr. Huxley regarded as the principal objection to Social- 
ism; 2 for under this plan, although every member of the 
community would be assured a comfortable income, his 
comforts would be limited by the number of children he 
brought into the world. Experience shows that the 
prudence of the middle class to-day constitutes a check 
upon overpopulation; that, in other words, over- 
population is to be feared, not in the middle class, but 
in those, such as the extremely poor, who are under no 
prudential check. 3 

The imprudent in such a cooperative commonwealth 
as is above described, have always before them the pros- 
pect of the state farm with its different degrees of un- 
attractiveness. If, therefore, to-day workingmen look 
upon the almshouse with abhorrence, it does not seem 
unreasonable to suppose that the workers in a cooperative 
commonwealth, accustomed to a far higher standard of 
living than the workingman of to-day, would be deterred 

1 Book II, Chapter I. 

2 1 am not aware that Mr. Huxley has ever suggested any other 
objection to Socialism than this ; but I may be mistaken. 
3 " Government," Vol. I, p. 339. 



316 WHAT SOCIALISM IS 

as much by the prospect of committal to a farm colony 
as a self-respecting worker to-day is deterred by the 
prospect of the almshouse. 

But there is another point of view from which the 
question of overpopulation must be considered: The 
increasing independence of women in America has already 
served to diminish the increase of population to the ex- 
tent which our sociologists regard as alarming. The 
population of the United States is increasing chiefly 
through immigration and the increase of immigrants. 
Here, as elsewhere, it is the extremely poor that propa- 
gate. Indeed, as women become more and more inde- 
pendent economically, as they certainly would in a 
cooperative commonwealth, there seems to be more 
danger of underpopulation than overpopulation. But 
here the state can no doubt exert a very important in- 
fluence; for if there seems danger of underpopulation it 
might increase its tax upon the industries of the state 
and apply the tax to the support of children so as to 
relieve parents at the expense of the entire state, of the 
cost of educating children, thereby removing all economic 
motive for underpopulation. 

I think, moreover, that since Mr. Huxley's day the 
whole opinion as to overpopulation has changed. There 
is not a shadow left of the fears of Malthus; for the 
extraordinary results published in the 13th Annual Re- 
port of the Bureau of Labor show that productivity is 
likely to increase rather than diminish in a cooperative 
commonwealth, in view of the fact that all those now 
engaged in pure competition and therefore a burden on 
the community, will be put to the work of production, 
thereby increasing the productivity of the nation rela- 
tively to its numbers. 



CHAPTER III 
POLITICAL ASPECT OF SOCIALISM 

The importance of the political aspect of Socialism 
depends upon the kind of Socialism selected for study. 
In Fourier's system, the social side altogether predomi- 
nates — the political side is relatively unimportant. In 
state Socialism, on the other hand, the political side is 
the most important and the social side is subsidiary. In 
modern Socialism, the government takes an intermediary 
position; the functions of the state under modern So- 
cialism would be in some respects less extended than in 
such a government as that of Prussia; while in other 
respects it would be more extended; but in no depart- 
ment would it assume the excessive power and inter- 
ference generally associated with Socialism in the public 
mind. 

It cannot be too emphatically repeated that modern 
Socialism discards the idea of a common home or even of 
a common table except to the extent that a common table 
is sometimes found convenient in our own day. To just 
the same extent the cooperative commonwealth discards 
the idea of state ownership of industry and state owner- 
ship of land except within the limits set forth in the 
previous chapter. 

The two great political objections to Socialism are: 
that it would give to the government a power destructive 
of individual liberty; and that the corruption in our 

317 



318 WHAT SOCIALISM IS 

existing government demonstrates the unwisdom of in- 
creasing the scope of its operations. 

On the first of these objections it is not necessary to 
dwell; for it is obvious that the moment state Socialism 
is abandoned, this objection falls to the ground. The 
state no longer has the onerous and probably impossible 
function of assigning tasks; the state no longer controls 
the hours of labor; the state no longer interferes in the 
private life of the individual any more than to-day. 
The relations of the government are not so much with the 
individual as with conglomerations of individuals in 
the respective industries; and even here, the government 
does no more than indicate the amount of a given thing 
that must be produced and the rate at which the thing so 
produced is to exchange with the other necessaries of 
life. It has been suggested that just as in France where 
commercial cases are brought before purely commercial 
courts and thus separated from civil and criminal cases, 
so all things pertaining to production and distribution 
might be determined by an industrial parliament that 
would determine such matters as the amount of a given 
thing to be produced and the rate at which this thing 
is to exchange with other necessaries, subject to the 
approval of Congress. 

Such a system would have the great advantage of 
referring business matters to business men who would 
bring no other than business considerations to the solu- 
tion of them. It would relieve Congress of the necessity 
of discussing commercial details with which its members 
are generally unfamiliar, and it would above all prevent 
that sacrifice of business interests to purely political 
considerations which often occurs to-day. 

There will be an important role to be played in de- 
termining the amount of the various necessaries of life 



POLITICAL ASPECT OF SOCIALISM 319 

which the socialized industries will be called upon to 
produce, in distributing these products, exchanging sur- 
plus products with foreign markets, and distributing the 
proceeds of these exchanges. All this work is of a purely 
business character and should be confided to business 
men, who have shown themselves by their practical 
success in business fields most fitted therefor. It would 
seem wiser to refer these matters to a parliament com- 
posed of the representatives of associated industries, of 
agricultural producers, and of distributing bodies. It 
would be the duty of such a parliament to appoint its 
own executive and cabinet, and it may be advisable to 
associate with the representatives of agriculture and 
industry in such a parliament, representatives selected 
by the citizens at large, so as to minimize the possibility 
of combinations between powerful groups of industries 
for the purpose of determining questions of public interest 
to their particular advantage. 

No attempt will be made here to work out the details 
of such a system, the object of this book being rather to 
indicate the possibility of doing these things than to 
point out the particular method by which they should 
be done. 

The objection that the corruption in our existing 
government demonstrates the unwisdom of increasing 
the scope of its operations seems at first sight a formidable 
one. If our government is as corrupt as our " yellow 
journals" make it out to be, it seems folly to extend its 
functions and give it larger opportunities for the exercise 
of this corruption and for the demoralization of the 
community which this corruption tends to produce. 
There are, however, many reasons for believing that the 
less government has to do, the more corrupt it is; and 
the more it has to do, the less corrupt it is. 



320 WHAT SOCIALISM IS 

For example, the Board of Aldermen in the city of 
New York was once the governing body of the city. 
It was a body to which men of importance belonged 
because its functions were important. When corruption 
crept into the Board of Aldermen the legislature was 
persuaded more and more to abridge its powers, and 
Tweed availed himself of this disposition to take prac- 
tically all the powers of government out of the hands of 
the board and concentrate it in a small body of men 
called "supervisors/' to which he took care that he and 
the members of his ring should belong. Some time after 
the Tweed ring was broken up the Board of Aldermen 
retained the right of confirming the appointments of the 
mayor; but this power too was taken from it by ex- 
President — then Assemblyman — Roosevelt in 1884, and 
from that year the Board of Aldermen became little more 
than a franchise-bestowing corporation. The board has 
consequently become so corrupt that the title of Alder- 
man, which used to be a title of honor, is in New York a 
title of disgrace. If we compare the Board of Aldermen 
to the board which corresponds to it in London, we 
shall find a totally different state of things. In London 
it is the County Council that governs the municipality, 
and accordingly we find on it men who stand first in the 
ranks of the business world. 

But there is another consideration of vastly more im- 
portance than this. New York citizens continue to com- 
plain year after year of the low order of men selected by 
its citizens, not only to the Board of Aldermen, but to all 
elective offices, including the State Assembly and the 
Senate. Yet they do not stop to inquire the reason for 
this, though it is obvious. What stake have the majority 
of New York citizens in the government of the city? 
The vast majority are not interested in the tax rates, 



POLITICAL ASPECT OF SOCIALISM 321 

for they do not pay taxes, or do not think they do. The 
majority are not interested in an efficient fire department, 
because they do not own property likely to be destroyed 
by fire and, indeed, it is said that it is members of this 
very majority that start most of the fires in New York. 
They are not interested in clean streets, for foul though 
our streets be, they are not as foul as the unwholesome 
tenements. They are not interested in an efficient police. 
They are not interested in a board of education, because 
all they want to get out of school for their children is 
reading, writing, and arithmetic — enough to get a job. 
It is difficult to see in what respect the large majority of 
our citizens are interested in good government at all. 

What then are they interested in? They are interested 
in bad government. They want to get a brother or a 
cousin on the police force; and they want the police 
to be complaisant to a brother or a cousin in a liquor 
saloon. The retailer does not want to be disturbed in 
his encroachments on the sidewalk. The building trade 
does not want to be annoyed by a too conscientious 
building department. The German wants his beer on 
Sunday and barrooms want to do business on Sunday. 
The peddler wants to violate street ordinances and stand 
his cart in the already too crowded streets. Churches 
want to receive per capita contributions to their asylums 
and have long made efforts to secure per capita contri- 
butions to their schools. The gambler wants to keep 
open his gambling den; and the people want the gambler 
to be undisturbed. The business man, the corporation, 
and the criminal want to be "let alone"; and those dregs 
of the population too low to be able to use the vote, 
want to sell it for a pittance on election day. These are 
the conditions under which distinguished citizens and 
committees of one hundred expect to secure good gov- 



322 WHAT SOCIALISM IS 

ernment ! And we go on ineffectually organizing municipal 
leagues, good government clubs, and citizens' unions to 
this hopeless end. It is not reasonable to suppose that 
in a government determined by the majority we can~ 
expect the government to be good when the majority 
does not want the government good, but wants it bad. 

Occasionally the government in New York gets so bad 
that it outrages even our outrageous majority, and the 
overthrow of bad government is regarded as a triumph 
for reform. But no reform movement has ever lasted 
more than one administration. The public has em- 
phatically assured us, over and over again, that it does 
not want reform administration, and indeed it may be 
said that some of these reform administrations have been 
just as bad as those they were intended to reform. 

Municipal politicians want good laws, if at all, in order 
to use them for the purpose of levying blackmail, and the 
community is willing to pay the blackmail so long as it is 
not too extortionate. Business men find it cheaper to 
pay blackmail and be allowed to do what they want. 
And the same is true all the way down the line until we 
get to the criminal class, which has the biggest stake in 
bad government of all. 

Yet the strange anomaly of existing conditions is that 
while the majority of the citizens of New York have 
shown year after year for a century that they want bad 
government and mean to have it, these citizens are not 
bad men, but want to be good. It is the folly of our 
economic conditions that makes them want bad govern- 
ment, and no more pitiable sight was ever presented to 
gods and men than this city of New York, or indeed any 
other of our great cities, full of citizens animated with 
the best intentions, forced by economic conditions to be 
bad. It has not yet seemed to dawn upon the reformers 



POLITICAL ASPECT OF SOCIALISM 323 

of the present day that, if they want to have good gov- 
ernment, the majority of the citizens must be interested 
in the government being good; and not, on the contrary, 
interested in its being bad as at this present time. 

There are two ways of accomplishing this. One way 
has been pointed out; to put an end to the competitive 
system that sets every man at the throat or pocket of 
his neighbor. The other is to enlarge the functions of 
the government sufficiently to make it important to every 
citizen that the government be good; then only will 
public spirit become stronger than private interest. 

This conflict between public spirit and private interest 
is not a matter about which there can be any longer any 
doubt. When a group was engaged in organizing the 
City Club, we were told not once but a dozen times by a 
dozen different men of high standing in the community, 
that the whole question of good government to them 
resolved itself into this: "Can I by contributing money 
or time to reform sufficiently reduce taxes to make it 
worth my while to give my time and my money to this 
thing; or is it not better for me to use my money in 
purchasing protection from the organization that now 
controls the city and devote my time to my own private 
affairs?" To these men the question of good government 
was simply a question of tax rate, and these citizens are 
the ones least touched by political conditions. When we 
come to citizens whose business puts them continually 
in contact with political conditions, we find the contrast 
between public spirit and private interest still more 
marked; in the corporations that want franchises, in 
the builders who want their plans approved, and in the 
citizens already described who have an interest in keep- 
ing on good terms with the powers that be. 

If now we remove the temptation on the one hand and 



324 WHAT SOCIALISM IS 

give a motive for good government on the other, is it 
not reasonable to suppose that we are more likely to 
obtain good government than now? 

Temptation can be removed in many ways. Alto- 
gether the greatest motive for corruption is that furnished 
by the eagerness of corporations to secure franchises. 
Indeed the city was at one time governed by the owners 
of our city transportation system. The temptation to 
violate building laws would be removed if it were the city 
who built and not the private individual. The tempta- 
tion to vote for a corrupt police force would be removed 
if the city instead of private barrooms sold alcoholic 
drinks. The temptation to vote for corruptible milk 
inspectors would be removed if the city instead of private 
dealers supplied milk. In a word, if the city were to 
undertake the tasks heretofore suggested, practically all 
temptation for graft would be eliminated. 

The same process would not only eliminate temptation 
for graft, but would give the citizens a stake in good gov- 
ernment. If the city distributed milk the citizen would 
be interested in having pure milk at a low price; if the 
city owned tramways, the citizen would be interested in 
having transportation effective and cheap; if the city 
manufactured gas and electric light, the citizen would be 
interested in having good heat and light at proper prices; 
and so at last the dream of the reformer that all citizens 
of the same city regard themselves as stockholders in the 
same corporation, would cease to be a dream and would 
be realized. They would have the same interest in the 
gas plant, electric plant, ice plant, milk plant, transporta- 
tion plant of their city as a stockholder to-day has in the 
dividends which these respective industries accord him, 
though the dividends would not be paid in gold, but in 
wholesome service at cheap prices. Then only would 



POLITICAL ASPECT OF SOCIALISM 325 

the conflict between public spirit and private interest 
con\e to an end, for a man would find it more to his in- 
terest that the government be carried on honestly and 
efficiently than he does now to secure a government that 
is dishonest and inefficient. In a word, as Mr. Mill 
said that the cure for the abuse of liberty is more liberty, 
so the cure for the abuse of government is more govern- 
ment. This must not be understood as a relapse in favor 
of state Socialism. It cannot be too often repeated 
that it would be as great an error to confide too much to 
the state as, at present, it is an error to confide too little 
to it. The solution is to be found in taking the middle 
course: medio tutissimus ibis. Give to the government 
the work it is fitted to do and no more. What work it 
is fitted to do and what work it is not fitted to do has 
already been explained. 1 

Amongst the tasks for which it is fitted is the work 
of Education: 

§ 1. Education 

There is no reason why the present system of educa- 
tion should be much changed in a cooperative common- 
wealth. In its nature it would remain very much the 
same and would only be extended in time; that is, all 
children who show themselves capable of profiting by 
education will have the opportunity of extending their 
education as far as their abilities justify. Education 
need by no means be confined to the state. There is no 
reason why the existing universities should not continue 
their work of education even though they be maintained 
by Rockefellers and Carnegies, and throw all their weight 
in support of the competitive system against the co- 

1 Book III, Chapter II, 



326 WHAT SOCIALISM IS 

operative. Socialism stands for light, and if at any 
period in its development it turns out that the community 
is not fitted for the phase of Socialism which it has at- 
tempted, it may be important to correct the perfunetor- 
iness of official administration by a larger dose of private 
initiative; and in such case let privately endowed schools 
and universities be there to preach this doctrine. 

Nor need there be any objection to sectarian schools. 
Once the human mind is freed from the shackles of 
economic servitude, it can be trusted to choose its re- 
ligion, whether educated by sectarian schools or not. 

The essential difference between the educational sys- 
tem in a cooperative commonwealth and under existing 
conditions will be that, inasmuch as child labor in com- 
petitive industries will be absolutely forbidden, no child 
will be deprived of education by economic conditions. 
Every child, therefore, will have an equal opportunity 
for mental development. 

And the fact that the hours of work will be shorter 
will give to every human being leisure throughout his 
his entire life in which to develop talents of which no 
trace may be observable during attendance at school 
or university. The cooperative commonwealth, there- 
fore, without changing the existing forms of education, 
will furnish to every man, woman, and child an oppor- 
tunity for educational development during the whole of 
life instead of confining it as now to the very first few 
years of it. 

It is important to note that, under this system, every 
industry will be free to work as few hours as it chooses, 
subject only to the condition of working long enough to 
pay taxes, to furnish the minimum required by the state, 
and to create a fund to provide for sickness, accident, and 
old age. 



POLITICAL ASPECT OF SOCIALISM 327 

Citizens in this respect will divide themselves into 
different categories: 

Some will want to work the least possible and devote 
the rest of their time to idleness or pleasure. Others will 
want to work at the particular industries in which they 
are engaged the least possible and devote the rest of their 
time to such things as will more interest them — to lit- 
erature, art, music, or even to some other industry — even 
to industries competing with the state. Others, instead 
of working the short hours required in a cooperative 
commonwealth, will prefer to work long hours so as to 
have a longer vacation than that enjoyed by the majority; 
others, on the contrary, will prefer to work long hours 
at the industry to which they belong, not with a view to 
earning a longer vacation, but for the purpose of earning 
more wages applicable to the increase of their comforts, 
luxuries, and amusements. 

It would not be difficult for every industry to take 
account of these various contingencies: A certain num- 
ber of hours those engaged in a particular industry will 
have to work, but they will be far shorter than the hours 
of to-day. Those who volunteer to work longer hours 
will be allowed to work longer hours. The work of the 
factory will naturally be divided into two shifts : the one, 
a morning shift; and the other, an afternoon shift, so 
that one shift can put in all their work in the morning 
and the other in the afternoon. Who shall work in each 
shift will be determined primarly by choice and, wherever 
choice cannot be resorted to, by lot. 

Such a condition of things as the foregoing would give 
to every industry the greatest opportunity for transfer 
from one industry to another. One who desired to ex- 
change steel working for garment making, could work 
during the morning shift at the steel trade and during the 



328 WHAT SOCIALISM IS 

afternoon shift at the garment trade; and when he had 
become proficient in the garment trade, he would be 
able to abandon the steel trade altogether and devote 
all his working hours to garment making. 

Still more important, the system would give an oppor- 
portunity to every man to develop his peculiar talents, 
however late in life. It is well known that men of genius 
often show no trace of their genius at school. It is 
impossible to calculate how much human ability is lost 
to the race by the fact that, not being observable in 
the few school years during which children are subject 
to observation, it is crushed out altogether in the competi- 
tive mill. The fact that the number of hours we shall 
have to work in a cooperative commonwealth would be 
short, would give to every man the rest of the day in 
which to develop his undeveloped talents. 

§ 2. Churches 

There is no reason why churches should not be sup- 
ported in a cooperative commonwealth under exactly 
the same conditions as to-day. It is probable, however, 
that there will be a tendency to modify public worship 
so as to render it less subject to obvious objections than 
to-day. 

At the present time, children animated with a desire 
to preach are encouraged to join the ministry; and it 
sometimes happens that men of vast business and political 
experience are made by the convention of respectability 
to sit every Sabbath Day under a boy in the pulpit read- 
ing crude theological essays. Few men are equipped 
in a manner usefully to instruct or advise their fellow 
creatures in matters so intimate as those of religion until 
they have attained years which, while they unfit them for 



POLITICAL ASPECT OF SOCIALISM 329 

the hard work of Industrial life, do by accumulated ex- 
perience peculiarly fit them for the work of the pulpit. 

The divinity school and the divinity student will tend 
to diminish and our pulpits will be filled by men who have 
shown themselves during fifty or sixty years of active 
w T ork in the community to be best fitted to fill them. And 
these men, having at that age earned a retiring pension, 
will not be at the expense of the community nor will they 
be required by economic conditions as at present, to 
preach doctrines as to the truth of which some are in 
doubt and others absolutely disbelieve. 

§ 3. Political Construction 

Let us see now whether we can come to some conclu- 
sion regarding the political construction of government 
under a cooperative commonwealth. The idea prevails 
that Socialism involves an extreme centralization of 
government. This, however, is quite contrary to modern 
notions of Socialism. Indeed, in one sense of the word, 
Socialism upon the plan already proposed would deprive 
the federal government of much of its power. Nor do I 
see any reason why our present federal form of govern- 
ment should be materially changed. For example, the 
present state governments would be maintained with 
practically all the rights they now enjoy, and the federal 
government would continue to operate with less than the 
enumerated pow 7 ers given it by our present constitution. 
For example, instead of having as at present the right 
to regulate commerce, to coin money, and to make patent 
laws, these powers would be delegated to the industrial 
parliament subject only to the approval of Congress. 
And although the title of all such properties as railroads, 
mines, etc., would be vested in frhe United States, the 



330 WHAT SOCIALISM IS 

effectual control and administration of these properties 
would be left to the industrial parliament, so that real 
power as regards these matters would be exercised not by 
the federal government, but by the industrial parliament, 
elected not upon the geographical basis of Congress, but 
by the industries respectively wheresoever situated, as 
explained in the previous chapter. 1 

It would be well to give the right of appeal to Congress 
because the industrial parliament would consist of pro- 
ducers and each would have an interest in securing for his 
industry the largest price possible. It may be feared that 
a few powerful industries might, by the number of votes 
they control in the chamber elected proportionately to 
numbers, secure for itself privileges not fair to other 
industries. This power would be restrained by the fact 
that the other chamber, elected according to industries, 
not numbers, would exercise a wholesome check upon any 
such attempt, and an appeal to Congress may therefore 
not be necessary. Nevertheless, Congress would repre- 
sent the whole mass of the nation and would be, as it 
were, the consumers' parliament in its relation to the 
industrial parliament. And it would seem proper to 
give to Congress the right to reconsider and discuss all new 
departures in connection with the business of the country, 
not only out of consideration of the rights of consumers, 
but also for the dignity of Congress. 

What under these circumstances would be the special 
functions of Congress? Congress would continue to exer- 
cise the powers it now exercises as regards collecting taxes, 
establishing rules of naturalization, providing for the 
punishment of counterfeiting, establishing postoffices and 
postroads, organizing federal courts, punishing piracies 
and felonies committed on the high seas, and offences 

1 Book III, Chapter II. 



POLITICAL ASPECT OF SOCIALISM 331 

against the law of nations, declaring war, and providing 
for and maintaining the army, navy, and militia. 

The States would enjoy all the rights they now enjoy 
as regards the federal government; but the cities would 
enjoy much larger powers of government than they now 
do. There seems to be no reason why the question 
whether the city of New York should own its own subway 
should be referred to farmers sitting in Albany, who have 
no interest and little, if any, knowledge of the needs and 
resources of the city of New York. It is probable, there- 
fore, that on the whole the effect of Socialism would be to 
decentralize rather than to centralize. 

The parties in a cooperative commonwealth would 
probably be determined by the main issue between 
cooperation and competition, and we find here a reason 
for leaving to Congress the last word as regards the 
decisions of the industrial parliament. For the latter 
would be a parliament of cooperative industries and 
disposed, in protecting these industries, to perpetually 
invade the territory of competition. So long as humanity 
needs the stimulus of competition, it is essential that this 
element be fairly represented in the political organization 
of the state. All measures tending to restrain competi- 
tion ought therefore to be subject to the approval of the 
whole nation represented in Congress. 

One principal bourgeois objection to Socialism is that, 
under competitive conditions the men best fitted to run 
an enterprise are those to whom business enterprises are 
to-day confided upon the principle of the survival of the 
fittest; whereas under a cooperative commonwealth, the 
selection of those who are to manage industries must be 
left to the doubtful intrigues of politics. This objection 
cannot be seriously taken into consideration. There is 
probably nothing more difficult for the bourgeois to 



332 WHAT SOCIALISM IS 

understand than the difference that would exist between 
the politics of a cooperative and those of a competitive 
commonwealth. In the latter, the field of politics is 
inevitably a cesspool of corruption, because every business 
man has something to lose or gain through politics. 
The tariff law just enacted presents one of the most recent 
illustrations of this. Not only so, but the men appointed 
to office and elected to Congress in our competitive com- 
monwealth are selected by business interests, and not 
appointed because of special fitness for the task. 

In a cooperative commonwealth this situation would be 
reversed. When all our comforts in life and the neces- 
saries of existence are furnished by our municipalities 
and our guilds, the management of these municipalities 
and guilds will be of the utmost importance to every one 
of us. Our citizens, instead of being interested in bad 
government, will become interested in good government, 
in good management and in good administration. Here 
the public will benefit by the power of recall which, 
though it may w T ork very imperfectly under competitive, 
ought to work well under cooperative conditions. For 
every man is interested in his municipal bakery furnishing 
good bread, his municipal gas plant furnishing good gas; 
and citizens will be so deeply interested in matters that 
touch them as nearly as this that they will not be in- 
fluenced by political cabals to put in a bad man as super- 
intendent of the municipal bakery, or to replace a good 
one by a bad one for purely political reasons. 

One reason why our politics are bad to-day is that 
hardly any of us have time to give to making them good 
even if we wanted them good. The workingman who 
works ten or more hours in the factory and travels two 
or more hours to reach his work in the morning and 
return home when his work is done, can hardly have much 



POLITICAL ASPECT OF SOCIALISM 333 

vitality left to attend to politics. Indeed, the complaint 
of the trade unions is that he has not vitality enough left 
to attend to matters so important to him as those of his 
own trade union. But when the workingman in the first 
place is thoroughly trained by an education that will 
last not less than eighteen years — when he is not called 
upon to work more than four or five hours a day, he will 
have the knowledge necessary to understand his political 
needs, and the leisure to organize political movements 
when necessary to remove a bad administrator and put a 
good administrator in his place. 

Indeed, popular government is impossible under cap- 
italism for the reasons just stated; those of us who want 
good government have not the time to secure it. Popular 
government is only possible when the people are suffi- 
ciently educated to understand their rights and have 
leisure enough to organize with a view to enforcing them. 

In the foregoing two chapters entitled, respectively, 
The Economic Construction of the Cooperative Common- 
wealth, and The Political Aspect of Socialism, I have 
endeavored to draw a picture of a cooperative common- 
wealth in which capitalism is eliminated from the pro- 
duction and distribution of all the necessaries and many 
of the comforts of life; leaving, however, full play to the 
existing competitive system as regards the luxuries, 
some of its comforts, and even as regards necessaries 
wherever the cooperative commonwealth fails to do its 
work up to the standard of taste of the community. 

This picture has been drawn not because it is possible 
at this time to forecast exactly what this economic and 
political construction will be, but because many persons 
find it impossible to form to themselves any idea how 
things can be produced and distributed without the help 
of capitalism. No more is claimed for these chapters 



834 WHAT SOCIALISM IS 

than that they do present a scheme by means of which 
necessaries and many comforts can be produced and 
distributed without the evils of capitalism, of unemploy- 
ment, of pauperism, of prostitution, and of economic 
crime. 

Obviously, the two foregoing chapters suggest a 
thousand questions to an inquiring mind, but I hope that 
the missing details cannot be classed amongst those details 
which Gladstone characterized as organic. In other words, 
I hope that they present a picture giving sufficient 
details to make it clear that Socialism, as regards the 
production and distribution of the necessaries and most 
of the comforts of life, is not only beneficial, but practical 
and economical; that, in a word, it puts an end to the 
waste and the anarchy which jointly characterize the 
capitalistic system of to-day. 



CHAPTER IV 

SCIENTIFIC ASPECT OF SOCIALISM 

Herbert Spencer has contributed more than anjr 
other modern writer to emphasize the effect of environ- 
ment upon life, whether vegetable, animal, or human; yet, 
singularly enough, in applying his scientific conclusions 
to sociology, he entirely failed to take account of the 
essential difference which exists between natural environ- 
ment and human environment; between the effect of 
evolution upon life prior to the advent of man, and its 
effect upon life subsequent to the advent of man. He 
applied to human development the laws of evolution 
which he found working prior to man, though man has 
reversed the natural process of development so that 
evolution, under the environment created by man, is 
taking and must continue to take a direction entirely 
opposite to that which it took under the dominion of 
Nature alone. Into what errors Mr. Spencer was led 
by his failure to recognize the difference between human 
and animal evolution may be gathered from the fact 
that he denounced governmental effort to prevent dis- 
ease as " sanitary dictation " ; 1 he denounced also 
municipal ownership of gas and water, the building by 
the state of houses for the poor, free libraries, free local 
museums, free education, and generally all that he 
includes in the expression "coercive philanthropy." 2 

1 "Principles of Sociology," p. 414. 

2 "Government or Human Evolution/' Vol. II, p. 181. 

335 



336 WHAT SOCIALISM IS 

He assumed that the predatory system which he saw 
prevailing in the domain of Nature must prevail also in 
the domain of Man; and thus became an apostle of 
laissez /aire and of the competitive system. As such he 
advocated the utmost limitation of state interference 
and opposed the Socialistic trend of modern legislation 
on the ground that man is, as it were, doomed to per- 
fection by the principles of evolution, and that any effort 
of his to modify evolution can only result in retarding it. 
He was led by the analogy between society and organism 
into the theory that human institutions must be allowed 
to grow as organisms grow, and that efforts on the part 
of man to construct his own institutions produce more 
evil than good. 

Mr. Huxley demolished the whole sociological structure 
which Herbert Spencer built up on these errors in three 
essays, to which the reader is referred. 1 The subject is 
also fully treated in the first volume of " Government or 
Human Evolution." 2 The effort will be made here to 
condense the argument and conclusions therein drawn by a 
short study of environment — natural and human — with a 
view to demonstrating the control which man has acquired 
over his environment and thereby over his ultimate 
destiny. This leads to a study of the effect of the com- 
petitive and cooperative systems on type respectively, how 
far society is a growth and how far a construction, and 
how far human nature can be modified by the conscious, 
deliberate purpose of Man; all this to demonstrate that 
human happiness can be best attained by subsituting co- 
operation for competition to the extent necessary to put 
an end to the evils resulting from the competition of to-day, 

l " Essays on Evolution and Ethics," " Essays on Science and 
Morals," and "Struggle for Existence in Human Society. 
2 " Government or Human Evolution," Vol. I, p. 239. 



SCIENTIFIC ASPECT OF SOCIALISM 337 

without for that reason eliminating wholesome competition 
altogether. 

There are two kinds of environment : the environment we 
find in Nature, and the environment made by Man. 

We shall study first the environment of Nature, and 
begin by distinguishing therein two systems: the com- 
petitive, or so-called struggle for life; and the cooperative 
or community system; confining ourselves to facts ob- 
served in Nature prior to or outside of the intervention 
of Man. 



§ 1. The Natural Environment 
(a) The Struggle for Life, or the Competitive System 

Beasts of the field are necessary products of their en- 
vironment. 

The study of the crust of the earth reveals that upon 
the central mass there have been laid layer upon layer of 
sand, clay, and limestone by successive seas, which have 
successively rested on now buried continents. Nearly 
every layer contains fragments of shell, scale, or bone 
belonging to the beasts that have succeeded to one an- 
other upon the earth during millions of years. 

These layers of sand, clay, and limestone are the leaves 
of a gigantic book, the earliest of which are burned by 
fire, the next scarred by it, and the most recent illustrated 
by pictures so vivid that we can read the story there of 
the development of Man from the lowest of all forms of 
life. 

The rocks are charts painted by the hand of Nature 
herself. 

In these charts we read the story of Evolution. We 
learn the geography of the world millions of years before 



338 WHAT SOCIALISM IS 

the age of history; we know that this land upon which 
we live has not only once, but often been sunk beneath 
a deep sea; that during the earliest period of which there 
is any record unburned, there was no living thing more 
highly organized than a crab; not a fish nor any animal 
possessing the backbone that distinguishes the vertebrates 
to which Man belongs from the invertebrates to which 
belong the lowest kinds of living thing. We know that 
later the whole face of the world was changed, and then 
followed a warm period called Carboniferous, and that 
just before and during this Garboniferous period there 
slowly developed fish possessing the backbone that marks 
one of the great strides in animal development. But at 
this time we see no trace of the four-footed mammalia 
which immediately preceded Man. 

In the marshes in which forests grew and died during 
the Garboniferous period, there were piled, one upon 
another, layers of vegetation that hardened into coal; 
this coal sank slowly beneath a deepening sea. In this 
so-called cretaceous sea were deposited, in its deepest 
parts, huge masses of chalk accumulated from countless 
shells; and upon its shores crept four-footed things 
resembling fish, as the seal and the sea-lion resemble 
them to-day, closely allied to them and clearly developed 
from them, as if fish stranded upon the shallows had 
used their fins for motion upon the banks, and out of 
fins made legs. And from the gigantic lizards of the 
cretaceous period we find in the overlying tertiary beds 
the infinite variety of four-legged animals which people 
our continents to-day. 

AH this knowledge, full of profound interest to the 
student of Man, comes from a study of the earth — 
Geology. 

And next comes Zoology, telling how this amazing 



SCIENTIFIC ASPECT OF SOCIALISM 339 

development of life from lower to higher forms proceeded. 
For centuries Man studied the living things on the earth, 
and added fact to fact till at last, a few years ago, Darwin, 
Wallace, and others demonstrated the law according to 
which this development takes place, the law of Evolution. 

Briefly it is this: 

All living things prior to the advent of Man tended to 
adapt themselves to their environment by the process 
know as the survival of the fit. Only those animals fit 
to survive, survived; all the rest perished. When there 
was a change of environment, as, for example, of climate, 
only those individuals survived that were capable of 
adapting themselves to this change. 

The process by which animals adapt themselves to 
changes of environment is as follows: 

There is in every new generation of animals an infinite 
variety; some differ enough from the rest to be called 
"sports." These differences are transmitted to future 
generations by heredity. Men have used these differences 
to create types of animals suited to their purpose. Thus 
by putting stallions built for speed to mares similarly 
built, Man has produced the race-horse. On the con- 
trary, by putting stallions built for drawing loads to 
mares similarly built, Man has produced the cart-horse. 

Before the advent of man this selection of types was 
made by the environment or by Nature, as the environ- 
ment used to be called. Hence the expression, natural 
selection, is used to describe the process by which Nature 
or environment selects certain types for survival at the 
expense of the rest; the process by which animals that 
live in the desert gradually adapt themselves to endure 
great heat; and those that live near the Poles gradually 
adapt themselves to endure great cold. 

The environment or Nature uses in this process of 



340 WHAT SOCIALISM IS 

selection a very cruel but effectual device: A great 
many more living things are born into the world than 
the world can support. In the lower forms of life Nature 
is wastefully fertile; thousands of herrings' eggs are laid 
for one herring that grows to maturity. This amazing 
fertility of Nature results in a struggle for life which 
condemns the enormous majority of living things born 
into the world to an early death, but has the singular 
advantage of allowing only the types most fitted to the 
environment to survive. And this process of natural 
selection acting in an environment favorable to develop- 
ment from a lower to a higher type has gradually caused 
the lowest forms of life, which consist of a mere sac of 
so-called protoplasm, to develop organs especially adapted 
to accomplish specific things: a mouth to take in food; 
a stomach to digest it; bowels to assimilate it; a system 
of circulation — arms and legs; a nervous system; a 
brain; ears; a nose; eyes; until at last, in the order 
of creation as demonstrated in the great Book of the 
Rocks, and as confirmed by zoology and other sciences, 
Man has evolved out of the original protoplasmic sac. 

Who created the first protoplasmic sac; why this 
cruel system was invented by which life was ordered to 
pass through millions of sacrificed and suffering bodies 
before it could emerge into the least imperfect form; 
why Man to-day must suffer still in the progress which 
he is destined to make from his present to a still higher 
form — these are things which it is not given us yet to 
answer. But that this process has taken place at the 
cost of great agony and during millions of years, is a 
fact which no man who has studied the face of Nature 
can deny. 

If we want to learn the art of happiness — for in spite 
of the process just described there is nevertheless an art 



SCIENTIFIC ASPECT OF SOCIALISM 341 

of happiness — we must understand the processes of 
Nature. It is only by understanding the processes of 
Nature that we can ever hope to modify them. 

And it is here that we come to the first great lesson we 
have to learn from a study of Evolution: 

Man has already modified the processes of Nature in 
the past, and he can doubtless still further modify them 
in the time to come. 

But before we undertake to study how far Man has 
modified, and may still modify, the cruel process of 
natural selection, there is another process observable in 
in Nature to which we must direct our most earnest 
attention. 

It is a common error to suppose that because Man has 
developed from a lower form of life through a process 
of struggle for survival that favors a few types at the 
expense of millions of other forms condemned by this 
struggle to suffering and death, therefore it is only by 
this same struggle that Man can hope to attain a higher 
form of development. This is the error that approves 
the competitive system and the resulting classification 
of men into a few rich and many poor. It is because the 
question as to the merits and demerits of the competitive 
system rests upon the principles of evolution, that it is 
indispensable for all who want to understand the com- 
petitive system also to understand the principles of 
evolution. For those who deny the force of competi- 
tion altogether are as wrong as the millionaires who base 
their argument in favor of the competitive system upon 
the law of evolution. 

We cannot neglect the argument drawn from the 
struggle for life involved in natural selection. Until we 
have shown that there is something better than this 
struggle that can be put in its place, we have left to the 



342 WHAT SOCIALISM IS 

millionaires the vantage-ground, from which they can 
quiet the conscience of the world. Thousands of our 
fellow-creatures who are separated from us by the acci- 
dent of wealth would come to our side were they not 
sincerely convinced that poverty, pauperism, and crime 
are necessary evils, belonging to the cosmic principles of 
evolution through which Man has attained his existing 
dominion, and through which he may hope, though not 
without infinite patience and agony, ultimately to reach 
a still higher station. 

This error must be removed, and it can only be removed 
by sober argument. Temper will not do it; nor indigna- 
tion; nor vituperation; nor hate. The plain facts, if 
properly marshalled, are sufficient to prove the error of 
the notion that competition is a necessary evil, and that 
society cannot exist without unlimited competition, and 
the poverty, pauperism, and crime that result therefrom. 
The first of these facts is that by the side of the com- 
petitive system just described, there is in Nature also a 
cooperative system almost as highly developed as the 
competitive system and destined eventually almost to 
take its place. 

(b) The Cooperative System 

We have seen that the struggle for life has had for 
effect to permit only those forms of life to survive that 
adapted themselves to the environment, and that when 
the environment was favorable to development, this 
tendency of the fit to survive at the expense of the less 
fit caused an evolution from lower to higher forms of 
life. The effect of this tendency in the higher forms of 
life has been to create two opposite types — the carnivores, 
who became more skilful in tracking game, and more 






SCIENTIFIC ASPECT OF SOCIALISM 343 

powerful in destroying it; and the herbivores, the natural 
prey of the carnivores, who became more swift is escaping 
their pursuers. Now the herbivores, conscious of their 
weakness, early developed the instinct to herd for the 
purpose of common defence. The fierce carnivore, on 
the contrary, is prevented by his natural ferocity from 
herding. He tends to become solitary. Lions and 
tigers are solitary animals; whereas sheep, goats, horses, 
and cattle herd. This tendency to herd tends to develop 
in proportion as an animal is weak; so that it is in insects 
that we find the herding instinct most perfectly developed, 
and certain colonies of ants and bees present a picture of 
cooperation to which the attention of millionaires cannot 
be too strenuously directed. 

Let it be said at the outset that these colonies are not 
offered as models for us to imitate. On the contrary 
there are many features in these colonies which we ought 
diligently to avoid. But just as there are features in the 
competitive system that are good and some that are 
atrociously bad, so there are features in the colony system 
that are bad and some that are altogether good. It will 
later on appear that the essential privilege of Man is to be 
able to choose the good of both and eschew the bad. 

A beehive is a city of bees built by the entire community 
for its common use. This community consists for the 
most part of barren females who do all the hard work, 
and are therefore commonly called the workers; they 
build the comb, and add to it as the community enlarges; 
they attend on the queen bee — the only fertile female 
allowed to survive; they feed her, and act the part of 
midwife to her when she lays her eggs; they see to the 
hatching of the eggs, and by crowding about them pro- 
vide them with the necessary temperature; when the 
eggs are hatched, the workers feed the young ones dif- 



344 WHAT SOCIALISM IS 

ferently so as to produce a few fertile females to play the 
role of queen should the throne become vacant, a large 
number of males to be utilized when the nuptial hour 
arrives, and a larger number still of barren females to 
continue the work of the community; the workers collect 
honey from the flowers in the summer and store it away 
for common use during the cold season; they determine 
which of the fertile females is to be impregnated and 
become their queen; she is liberated on her wedding- 
day, and in a summer flight, pursued by the males, con- 
ceives. Then she returns to the comb, and is let loose 
upon the other fertile females in the comb, and watched 
as she stings her possible rivals to death one by one. 
Few males return from the nuptial flight; one only of 
them weds, and he perishes in the act; the others perish 
without wedding, or if they have strength to return to 
the comb, are despatched by the workers watching at the 
entrance to perform the execution. 

It is impossible to conceive a more complete system 
of cooperation or communism than this, or one which so 
little conforms to our notions of justice or welfare. In- 
deed, it is probable that from a human point of view the 
tiger in the jungle attains a greater measure of happiness 
than any member of a bee community; for the workers 
seem to labor without reward; of the males only one 
weds, and he perishes in the act; and the queen herself 
is kept a close prisoner during her entire existence, save 
only during the brief ecstasy of the nuptial flight. 

The lesson to be learned from insect communities 
seems then to be, not that cooperation in a natural 
environment results in the maximum of happiness, but 
merely that cooperation is as much as part of Nature's 
plan as competition, and that therefore the cooperative 
system is as available to man as the competitive. The 



SCIENTIFIC ASPECT OF SOCIALISM 345 

problem before man is how to take the best of both sys- 
tems, and eliminate the bad. 

But there is a further lesson to be drawn from the 
singular customs that prevail in the hive and in the ants' 
nest: 

In both, the entire energies of all seem concentrated 
upon tw T o problems — the support of the community, and 
its perpetuation; and as these two problems are identically 
the same as those by which men are confronted, the sys- 
tems adopted to solve them cannot but be of absorbing 
interest to Man. 

Nature or environment follows two diverging lines in 
animal development. Along one line she seeks the per- 
fection of the individual; along the other the perfection 
of the community. But the ideal of perfection pre- 
sented by Nature is not Justice or Morality; it is per- 
petuation, for perpetuation is the prize offered to the 
most fit types in the struggle for survival. And there 
are obviously two ways in which types can succeed in 
this struggle — one by individual excellence, and another 
by sexual jealousy. And this sexual jealousy must be 
eliminated from a community if its members are to 
live in permanent harmony together. The scheme 
adopted by Nature in the beehive to eliminate sexual 
jealousy is radical and cruel, but effectual. 

Obviously, the community system proceeds with 
reckless disregard of the individual; the destruction of 
all the fertile females save the single queen and of all 
the male sex; the singular fact that the sting cannot 
be used save at the cost of the life of the individual using 
it; the enforced chastity of the workers — all prove that 
Nature's plan for securing the welfare of the community 
is to sacrifice thereto the happiness and the lives of the 
individuals that constitute it. 



346 WHAT SOCIALISM IS 

Obviously, Man must find some better solution of this 
problem than ants and bees. How Man has at various 
periods attempted to solve it we shall study later. But 
before leaving natural environment, we have a lesson to 
learn from the moral qualities which the two lines of 
divergence have respectively developed — the qualities 
of the solitary carnivore and those of the communistic bee. 

He may be helped by observing the habits of herding 
animals that are neither so fierce as the lion nor so servile 
as the ant. For although it has of late been the fashion 
to justify our existing capitalistic system by exaggerating 
the extent to which competition exists in Nature, careful 
study reveals that though competition does prevail be- 
tween different species, it is the exception rather than the 
rule between individuals of the same species. Nature has 
proceeded along two lines of development: one of mutual 
struggle, and another of mutual aid. Thus we find even 
carnivora, such as the hyena and the wolf, herding for 
the purpose of the chase; even foxes and bears have 
been seen to herd; eagles, kites, and pelicans notoriously 
associate to this end. Practically all herbivora herd 
more or less permanently, the permanence of the herd 
depending apparently upon the mildness or the ferocity 
of the sexual instinct. In the case of the elk, the stag, 
the bull, and the horse, that fight for the female, and pre- 
vent the weak from perpetuating the race, the herd 
breaks up into groups during the rutting season; whereas, 
in the case of apes and monkeys that herd, the herd 
remains permanent. 

Too little is known about the sexual relations of such 
animals as herd permanently for any certain conclusions 
to be drawn from them, but it can be said without fear 
of contradiction that Nature has succeeded best through 
the combination of strength, selfishness, and ferocity on 



SCIENTIFIC ASPECT OF SOCIALISM 347 

the one hand, and that of intelligence, altruism/ and 
servility on the other; for it is the lion and the tiger 
that dominate the jungles of Asia; in Africa and South 
America it is the white ant. 

These considerations lead us to conclusions of great 
importance, for they enable us to trace the development 
of certain habits or instincts, which, when we find them 
developed in Man, become lifted into virtues or vices 
according to their nature and intensity. Thus solitude 
imposes upon solitary animals habits of selfishness and 
self-reliance; the tiger has no one to look to but himself 
for the satisfaction of the two great animal needs — food 
and self -perpetuation; he is the Ishmaelite of the animal 
kingdom; his hand is against everyone and everyone's 
hand is against him. Whereas, community life imposes 
upon the ant habits of docility and altruism; she works 
not for herself, but for her neighbors; she is a natural 
slave, but a slave to a useful end — the common weal 
of all. 

To sum up: Natural environment has operated on 
animal life through the principle of evolution or survival 
of the fittest in such a manner as to develop physical 
organs and instinctive habits, both of which seem to be 
necessary results. These physical organs and instinctive 
habits depend for their nature and excellence upon two 
parallel systems: 

According to one, the struggle for life has taken place 

1 The word " altruism' ' is used instead of the more familiar 
word "unselfishness" to avoid the criticism of those who contend 
that there is no such thing as unselfishness. It is true that we 
are all selfish in the sense that we are all seeking happiness for 
ourselves ; but selfishness can be defined as the search for happiness 
regardless of the happiness of others, and altruism as the search 
for happiness through the happiness of others. 



348 WHAT SOCIALISM IS 

not only between one species and another, but also 
between individuals of the same species; this has resulted 
in individual excellence, as in the case of the lion and 
the tiger; and has developed habits of selfishness, self- 
reliance and ferocity. According to the other, the 
struggle for life has taken place mainly between one 
group and another, and hardly at all between individuals 
of the same group, but both the lives and the happiness 
of the individual are recklessly sacrificed to it; this has 
resulted in collective excellence at the expense of the 
individual; and has developed habits of docility and 
altruism. 

In the former, or competitive system, there is the 
greatest individual freedom of action and the greatest 
individual satisfaction of animal propensities, but there 
is the greatest individual risk, the few survive at the 
expense of the many, and there is little or no social 
satisfaction. 

In the latter, or cooperative system, there is less 
individual freedom, less satisfaction of animal propensi- 
ties (indeed, sexual appetite is left unsatisfied for all 
except one individual of each sex, and at the expense of 
personal liberty for the female and for the male of life 
itself), but there is least individual risk for the workers, 
and most social satisfaction. 

Intermediate systems partake of both the competitive 
and cooperative plan, none of the intermediate systems, 
however, leading to supremacy, and some of them re- 
sulting in degeneracy. 

Such are the results of the unconscious action of natural 
environment on living things. 

We are now in a position to study the actual and 
possible results of the conscious action of an artificial 
environment on Man. 



SCIENTIFIC ASPECT OF SOCIALISM 349 



§ 2. Human Environment 

Before studying the possible effects upon Man of an 
artificial environment, consciously and deliberately cre- 
ated by him with the definite purpose of attaining the 
maximum of human perfection and happiness, we must 
be clear as to the actual effects upon man of the artificial 
environment in which he finds himself. And first we 
must give its full value to the fact that the environment 
in which we live is in great part artificial, that it is the 
product not of Nature only, but also of Art. 

We have seen that the lower animals, prior to the advent 
of Man, were the necessary product of the natural en- 
vironment. We have now to study how Man has modi- 
fied the face of the world, as regards them and himself, 
by the application thereto of Art. 

The most obvious and striking change effected by Art 
on human life is in relation to climate. 

There is geologic evidence that the forefathers of Man 
in what is called the Micoene Period, while not so intel- 
lectual as Man, were of a far higher type than any living 
ape; the head, for example, indicates a superior structure. 1 
Now, the Miocene Period was exceptionally warm. The 
bones of the so-called troglodytes are found in the caves 
of the Dordogne with other vegetable and animal re- 
mains that indicate a tropical temperature. This was 
followed by the glacial epoch, which substituted for 
tropical conditions those now existing in the Arctic 
zone. The troglodyte had to choose between the alter- 
natives; he had to flee to the tropics before the cold wave 
from the North, or to resist the cold by recourse to Art. 

1 Lyell, Sir Charles, "Principles of Geology," 1872, Vol. I, Chapter 
X, p. 201. 



350 WHAT SOCIALISM IS 

It is probable that he did both; some did the one, and 
the rest the other; some fled to the tropics and degener- 
ated there into the existing anthropoid apes; the rest 
invented weapons with which to slay fur-bearing animals, 
to strip them of their skins, and convert the skins into 
clothing; used the shelter furnished by natural caves, 
and eventually discovered the way to produce a flame. 
This last Promethean gift was probably the first of the 
great human inventions. When Man discovered how to 
produce and utilize fire he became superior to climate. 

This discovery produced an amazing consequence; for 
it seems certain that our race made its first strides to- 
wards civilization in tropical countries; but that progress 
in the Arts, by enabling Man to inhabit colder and more 
bracing climates, permitted an increase in his power to 
resist not only climate, but all the other natural conditions 
hostile to his improvement; and so we find the Northern 
races gradually subduing those of the South, and demon- 
strating the great rule that man's progress is secured, not by 
yielding to natural environment, but by resisting it. 

The key to human progress in the past, and the probable 
key to human progress in the future, is the faculty of 
Man to resist Nature; and this faculty is twofold. In- 
telligence is the more obvious of the two elements. But 
intelligence is not sufficient of itself. Intelligence must 
be coupled with the power of self-restraint. For although 
intelligence is the light which can guide men toward 
perfection, it is useless unless accompanied by the willing- 
ness and power to follow the light. 

What avails it to the millionaire to know that he can 
by the intelligent use of his millions alleviate the misery 
of the poor, if he lacks the willingness and power to apply 
this knowledge? 

What avails it to us to know that by substituting co- 



SCIENTIFIC ASPECT OF SOCIALISM 351 

operation for competition in the production of the 
necessaries of life, poverty can be annihilated, if we have 
not the willingness and the power to effect the substi- 
tution? 

What avails it to a drunkard to know that drink is 
the cause of his misery, if he has not the power to re- 
fuse it? 

In man's struggle with climate, intelligence seems to 
play the principal role, but there is also a spirit of re- 
sistance, in strong contrast with submission that char- 
acterizes the lower animals. In other arenas the power 
of self-control plays a still more conspicuous part. There 
is probably no institution in which man differs more from 
the lower animals than in that of marriage; and none 
more characterized by self-control. If we compare the 
promiscuous intercourse that prevails between the sexes 
in troops of apes, with the fidelity that characterizes the 
highest types of marriage in our most highly civilized 
communities, we cannot but be struck, not only with the 
enormous gap between the two, but with the dominant 
role played in development from the lower to the higher 
type by the power of self-control. The passionate 
propensity that condemns the fiercer carnivora to sol- 
itude, and reduces even the docile bee to a wholesale 
massacre of one of the two sexes, has been so controlled 
in our civilization that we find men and women not only 
living in the closest proximity without violating the 
marriage vow, but even consecrating themselves to life- 
long chastity out of respect for a religious scruple. 

Man has attained this result through the training of 
children by parents in the family, of youth by masters 
in schools, and of adults each by himself in the world 
at large. 

Perhaps the most precious result of the institution of 



352 WHAT SOCIALISM IS 

marriage is the education furnished by the family which 
results from marriage. In Greek life this education was 
the kernel of Greek religion. Every family worshipped 
its own gods, and these gods were the shades of its 
ancestors. Almost every duty in life resolved itself into 
a duty to these shades; the duty to marry was but to 
ensure offspring who would continue to minister to the 
deceased; the duty of chastity, and indeed of morality 
in general, resolved itself into a duty to keep inviolable 
the sacred flame upon the hearth. 

The two virtues peculiarly stimulated by Greek religion 
were courage in man and chastity in woman; these 
singularly correspond to the qualities that characterize 
solitary carnivora — ferocity in the male and compulsory 
fidelity in the female. They are the virtues that attend 
individualism, and individualism so impregnated Greek 
civilization that it prevented the Greek cities from ever 
combining into a Greek nation, and ultimately left them 
a prey to the invader. And those two individualistic 
virtues — courage and chastity — became still more em- 
phasized under the Roman rule in the s'oldier and the 
vestal. 

Christianity introduced a new element into civilized 
life; Christ deprecated exhibitions of courage by in- 
culcating humility; He tempered the fierce demand for 
fidelity by bidding "him who was without sin cast the 
first stone at her." The virtue He taught above all 
was the virtue of Love; not love in the sense of natural 
affection, but love in the sense of sacrifice; not love con- 
fined to the family, but love extended from the family 
to the neighbor: "Love your neighbor as yourself." 
And so under the dispensation of Christ all men, being the 
children of a common Father, became as brothers one 
to another; the early Christians carrying out this theory 



SCIENTIFIC ASPECT OF SOCIALISM 353 

into practical life, abandoned the acquisition of private 
wealth and brought all their earnings into a common 
stock, giving to everyone according to his need. 

Unfortunately, the prosperity of the Church under 
Constantine converted it into a political machine as un- 
conscionable in its methods, and as effectual in results, 
as the so-called rings which govern many cities to-day. 
The Church forgot the virtues which it was instituted 
to teach; and our Western civilization has ever since been 
distracting us by encouraging the fighting virtues of the 
Roman soldier on the one hand, and the altogether 
inconsistent humility of the Christian saint on the other. 

But men and women cannot live close to one another 
for centuries, without having social virtues forced upon 
them; and while the competitive system which prevails 
in our industrial and international relations has stimulated 
the fighting qualities in us, the teaching of Christ has 
preserved in our hearts ideas of happiness which have 
more or less unconsciously created a tendency to replace 
competition by cooperation wherever possible. 

The joint effect of Roman and Christian rules of con- 
duct has been to substitute for the qualities that we ob- 
serve in Nature — the lust and ferocity of the carnivore 
and the servility of the ant — new qualities altogether 
different, and in some respects almost opposite. For 
lust has been replaced by a conception of the conjugal 
relation which converts marriage into a sacrament; 
ferocity has yielded to the courage of the medieval knight 
and the modern gentleman; servility tends to disappear 
and be replaced by respect for laws; and fear has been 
lifted by religion into reverence — "The fear of God is 
the beginning of wisdom. " 

The fact that these virtues are held up to us as desirable 
and that we are trained to conform thereto, is of dominat- 



354 WHAT SOCIALISM IS 

ing importance in considering the character of human 
environment; and were there nothing in human institu- 
tions to render the universal practice of these virtues 
impossible, we should assuredly enjoy the happiness that 
must result therefrom. 

Unfortunately there are two reasons why we cannot 
practice these virtues though we would: 

We are divided into nations, each striving against all 
the rest to secure for its citizens the largest possible share 
of the good things of this world. Every nation is com- 
posed of individuals or families, each engaged in a similar 
strife. 

The first, the international conflict, gives rise to a 
peculiar virtue called patriotism, which, in so far as it 
teaches a man to love the country to which he belongs, 
and the people amongst whom he lives, is altogether 
good, but in so far as it teaches him to hate and occasion- 
ally slay those of other nations is altogether bad. 

The second, the intranational conflict, gives rise to a 
quality which, though not recognized as a virtue, should, 
if measured by the rewards it receives, be assuredly 
regarded as the greatest of all — acquisitiveness; for the 
fortunate few who possess this quality gather unto them- 
selves all the good things in the world at the expense of 
all the rest. 

Let us briefly study each of these formidable obstacles 
to virtue and happiness : 

As regards the international conflict, the world is so 
large, and is peopled by races of men so different, that it 
would be quite impossible to include them all under the 
same government. The Red Indian is incapable of 
adopting our civilization; he would rather die. The 
Chinese has a conception of government so different 
from ours that he has no word in his language for patri- 



SCIENTIFIC ASPECT OF SOCIALISM 355 

otism. The Oriental, who has occupied the Danubian 
provinces for five centuries, is still so foreign to us that 
he cannot live amongst Christians except either as a 
conqueror in Turkey or a subject in Hindoostan. 

So long as these differences exist, there must be separate 
nations; and the smoke of international conflict must 
occasionally burst into a flame. 

Nevertheless, even to-day human effort can do much to 
diminish occasions for war; witness the Tribunal of The 
Hague and the daily multiplying treaties of arbitration; 
witness, too, the gradual extension of solidarity between 
workingmen beyond national frontiers and the growing 
disposition to organize regardless of them. 

As regards the intranational conflict — between indi- 
viduals belonging to the same country — there is much 
more to be said, for although the total elimination of 
occasions of conflict between citizens of the same nation 
may still be far off, there is serious reason to believe 
that a partial elimination of them is immediately possi- 
ble, and may constitute the most practical of all political 
programs, and the most vital of all religious faiths. 
Indeed, a thorough understanding of the problem pre- 
sented by this intranational conflict is so indispensable 
to its prosperous solution, that upon this understanding 
may be said to depend the question whether our civiliza- 
tion is to degenerate. 

The intranational conflict is mainly concerned with 
the acquisition of wealth; and because this conflict has 
so far inordinately enriched a few and impoverished the 
mass, it is the fashion for us to rail against wealth. 

But wealth is the necessary product of civilization, and 
like manure, it is a benefaction when lightly distributed 
over the right place, though a pest when heavily con- 
centrated in the wrong. The wealthier a community is 



356 WHAT SOCIALISM IS 

the happier it ought to be. It is not wealth itself which 
constitutes our grievance, but the method of its distri- 
bution. 

Now the unequal distribution of wealth is mainly due to 
the system of private property under which the few who 
have the gift of money-making acquire large fortunes, 
while the many are left in comparative poverty and even 
want. 

Under this system, every man, instead of working for 
all, is working only for himself, and he who has most 
acquisitiveness becomes master of those who have less, 
society being by this single quality divided into a series 
of classes or castes, at the top of which are a few mil- 
lionaires, and at the bottom the large contingent that 
after a life of misery end their lives in the almshouse, 
the prison, or the lunatic asylum — a contingent that has 
been determined by carefully prepared statistics to con- 
stitute one-fifth of the entire population in the richest 
country in the world. 1 

Private property has played an essential role in the 
slow enfranchisement of the people. But just as the 
cocoon serves an essential purpose in protecting the worm 
during its slow development, but becomes a prison which 
the butterfly discards when it attains its final freedom, 
so private property may turn out to have already served 
its purpose if we can demonstrate ourselves so far 
developed as to be fit to cast it aside. 

Let us recall what role private property plays in our 
human environment to-day: 

It is the great stimulus which sets each one of us to 
work for himself, and by working for himself to accumu- 

1 This conclusion is arrived at by Charles Booth in a statistical 
work which commands the approval of all authorities of whatever 
shade of political opinion. 



SCIENTIFIC ASPECT OF SOCIALISM 357 

late wealth that contributes to the maintenance of all 
the rest. It furnishes (in theory) a method under which 
the man who works most effectually gets the highest 
reward. 

Now, as it is essential in every community that every 
man should contribute to the maintenance of all, and as 
justice seems to demand that the workers should be re- 
warded according to results, it is claimed that private 
property solves the problem of production in a manner 
both effectual and just. * 

The competitive system, however, and the false notion 
of property to which the competitive system gives rise by 
setting every man to work for himself regardless of all the 
rest, prevents men from proceeding upon the far more 
economical plan of cooperation. 

§ 3. The Effect of the Competitive System on Type 

We have seen that under the law of evolution type 
tends to adapt itself to environment. It must so adapt 
itself or perish. There is no escape from this iron law. 
If the climate change from warm to cold, animals must 
put on blubber or fur; if the climate change from cold 
to hot, they must throw off blubber or fur. Those who 
adapt themselves to the change survive; those who do 
not adapt themselves die. 

So also, if in a given community the individual can 
secure the necessaries of life only on the condition of out- 
doing his neighbor, it is those who most successfully 
outdo their neighbors who prevail; those who are out- 
done sink deeper and deeper into poverty and ultimately 
join the irreclaimable fifth. 

The effect, then, of the competitive system on type is 
to stimulate the qualities that go to make up acquisi- 



358 WHAT SOCIALISM IS 

tiveness; selfishness and all the necessary results of 
selfishness — avarice, greed, envy, injustice, hardness of 
heart. 

It would be by no means fair to maintain that no man 
can be successful in business who is not cursed with all 
these vices. On the contrary, some of our greatest 
philanthropists have been successful business men. But 
philanthropy sometimes results from the blessed principle 
of reaction, under which vice, when it gets bad enough, 
creates a revulsion against evil. Reaction, however, is 
the eddy in the stream; and it is the stream and not the 
eddy that in the end counts. 

The main, the essential, the inevitable result of private 
property is to promote selfishness, for the competitive 
system creates an artificial environment to which the 
human type must tend to conform. This artificial en- 
vironment not only promotes selfishness at large, but 
tends to degrade every institution which man has 
invented in his effort to advance. Among these institu- 
tions, the two which have sprung from the noblest in- 
stincts in man, and ought most to tend to his improvement, 
are Marriage and the Church. Yet both are demoralized 
by the competitive system. 

In the state of nature, animals tend to improve through 
sexual selection. By sexual selection is meant the fight 
between males for the female, the result of which is that 
the strongest males are the ones that perpetuate the 
type. 

In the artificial environment produced by private 
property, a very different process is at work. Marriage 
tends to be determined by wealth rather than fitness; 
and the wealthy tend to have few children or none; 
whereas it is found that in the unwealthy classes, the 
poorest have the most children. Well-to-do people 



SCIENTIFIC ASPECT OF SOCIALISM 359 

protect themselves and their families from poverty by 
prudence, whereas, those who despair of escaping from 
poverty have no reason for refusing themselves what is 
often almost their only satisfaction; and the result is 
that while the houses of the rich tend to be desolate 
through childlessness, those of the poor are crowded with 
the offspring of despair. 

The religious conception of Marriage that it is a sacra- 
ment has become practically obsolete; particularly in 
this so among the rich, whose daughters are annually 
offered for sale in the market of Mayfair as shamelessly 
as not long ago were Circassian girls in that of Istamboul. 

The effect of private property on the Church is no less 
deplorable. It costs money to maintain a church; and 
the more splendidly a church is maintained the more 
money it costs. The priest has to live; bishops indeed 
have to live in a certain state. The Church, then, must 
have money. In some countries the Church secures 
money from the government, and is driven thereby into 
the questionable field of politics; in others, every individual 
church is thrown upon its own resources, and has either 
to make its services attractive by ritual, or to depend for 
its supplies upon one or two of the wealthy members of its 
congregation. It is not surprising, then, that under this 
subjection to wealth, Christians have abandoned the 
teaching of Christ, and forgotten that in early days they 
sold all and gave to the poor, contributed their earnings 
to a common stock, and resisted not evil but overcame 
evil with good. 

Yet the Church has rendered, and is still rendering, a 
priceless service to man. Falter though she may, she 
has preserved for us the Gospel of Christ. 

The blame rests not with the Church, but with the 
artificial environment which man has himself created, 



360 WHAT SOCIALISM IS 

and to which he alone can put an end — the environment 
that appeals to the selfishness of man, and having made 
man selfish, insolently asserts that in no other environ- 
ment can he be otherwise. 

Man will be what his environment makes him. 

If the environment stimulates selfishness, man will be 
selfish. If it stimulates unselfishness, he will be un- 
selfish. 

But man can by art so alter his environment that it 
will elicit the noble in man, instead of the base. 

Let us now sum up the difference between human and 
natural evolution, and arrive at some conclusion regarding 
the part man has played, and may still play, in his own 
advancement. 

§ 4. Brief Restatement 

Before the advent of man animal life prospered or 
degenerated according as the natural environment was 
favorable to progress or degeneration. The process of 
evolution was necessarily unconscious and undeliberate. 

With the advent of man a new force appeared upon the 
face of the world, the power to modify the environment 
so as to make it serve human needs, and accord with 
human intention. 

Before the advent of man, selection was exercised by 
Nature or the natural environment; since the advent of 
man it is man who has selected and not Nature; animals 
dangerous and useless to man have almost disappeared 
except in museums; and only those that are useful to 
him are allowed to survive. 

Climate is no longer paramount; man by the use of 
tools, clothing, architecture, and other arts, contrives 
to-day to live in climates which were once fatal to him. 



SCIENTIFIC ASPECT OF SOCIALISM 361 

By increase of knowledge man has acquired a control 
of the forces of Nature, which makes him now a master 
where he was once a slave. 

By increase of self-restraint — and self-restraint in- 
volves the subjection of natural instincts — man has 
developed qualities which permit of social existence un- 
known in any other race. 

Without having lost the self-reliance that characterizes 
the solitary carnivora, he has, by resisting Nature — by 
such artificial institutions as that of marriage, and the 
education which results from family relations — developed 
all the social virtues. Ferocity has been tempered; lust 
has been reduced to subjection; in the place of the one 
we now see courage; in the place of the other chastity; 
craft is growing into wisdom; fear into reverence. He 
has substituted for the standard of Nature the standard 
of Morality, and the substitution of the standard of 
Morality for the standard of Nature has permitted men 
and women to live in the same community safe from the 
ferocity that drives the larger carnivora to solitude, and 
from the massacre and mutilation which characterize 
such natural communities as those of bees. 

When from this point of view we compare man with 
the lower animals, so immense is his progress that we 
are tempted to believe perfection within the reach of his 
attainment. 

Two things, however, suffice to keep alive evil in man: 

While at almost every point he has so moulded his 
own environment as to eliminate the vices that char- 
acterize the rest of the animal kingdom, in two respects 
the predatory system still prevails: 

The international conflict keeps nations in perpetual 
competition with one another, and this periodically 
forces them to war; and the intranational conflict keeps 



362 WHAT SOCIALISM IS 

individuals in perpetual conflict with one another, and 
stimulates all the vices which most interfere with human 
happiness. 

The international conflict seems doomed to continue 
so long as man remains separated by racial antipathies 
and commercial interests. Efforts are being made to 
diminish occasions for war to the utmost possible, by 
bringing all races to recognize and aim at the same social 
ideal. But there would still remain ample occasion for 
war so long as men are kept in competition by conflict- 
ing commercial interests. The task first in importance 
and time, therefore, seems to be to eliminate as much as 
is advisable the commercial and industrial conflict, which 
has been already pointed out to be the great intranational 
obstacle to human perfection and happiness. 

Now the intranational conflict has been seen to re- 
sult from our industrial system. This, as at present 
organized, is an artificial creation of man; indispensable 
though it may have been to the gradual evolution of the 
race, it has always acted, and must always act to keep 
alive in man the very quality — selfishness — the elimina- 
tion of which is most essential to the happiness of a com- 
munity, and the absence of which particularly charac- 
terizes natural communities such as those ants and bees. 

While, then, man has resisted and in great part subdued 
Nature in the physical world by science, and in a world 
which he has himself created — the moral world — by self- 
straint, he has added to this artificial environment two 
institutions which tend to counterbalance the advantages 
already secured. These are national governments that 
create international conflict, and an industrial system 
that creates intranational conflict; and we are confronted 
with the problem whether these two hothouses of crime, 
hatred, selfishness and vice, can be dispensed with. 



SCIENTIFIC ASPECT OF SOCIALISM 363 

Science affords us the encouraging hope that they can. 
It points out that man has already suppressed many 
of the most merciless effects of the natural environment; 
that by virtue of the power through which he can in 
great part create and certainly modify his own environ- 
ment, he may still further push on the work of civiliza- 
tion if he will but recognize that the real enemy to human 
happiness is hatred and the real friend to it solidarity; and 
if he will return to the Gospel of Christ, which economic 
conditions have so far compelled him to disregard. 

Before closing the study of evolution it is proper to point 
out that we are now in a position to dispose of the con- 
tention that, because natural evolution proceeds upon 
the principle of the survival of the fittest, therefore human 
evolution must proceed upon the same lines. This is the 
argument that millionaires and individualists set up 
against those who believe in the possibility of diminish- 
ing human misery by reducing the occasions for human 
conflict. 

It is totally false. 

Man has demonstrated his ability to resist Nature and to 
progress along lines that are diametrically opposed to those 
of natural evolution. The whole fabric of human 
civilization is an answer to the millionaire's argument. 
The natural principle of the survival of the fittest is no 
longer at work. Man has put an end to it. The lion 
and the tiger no longer reign in the jungle nor the white 
ant in the Pampas. Man, alone, determines which animals 
shall live and which shall disappear. The weak in our 
own race no longer perish; mercy comes to their rescue. 
The strong are no longer the only ones to perpetuate 
the type; marriage protects the weak husband in his 
marital rights as well as the strong. Climate no longer 
determines survival; man has made himself master of 



364 WHAT SOCIALISM IS 

climate, and indeed works most effectually to-day in 
latitudes which at an earlier stage were peopled only 
by savages. 

At every point where man touches Nature he has re- 
versed the natural process. 

The unfit no longer perish, the fit no longer alone 
survive. Man is no longer the necessary result of the 
natural environment: he makes his own environment; 
and if he be wise enough he can so modify it as to modify 
himself with it. When, if ever, he so modifies it as to 
eliminate those elements in it which stimulate vice, 
then he will have realized the word of the Gospel, " Ye are 
Gods." 

§ 5. Can Human Nature Be Changed by Law? 

It is currently urged and has become a sort of maxim 
that human nature cannot be changed by law. Not 
only is this quoted by the bourgeois in his argument 
against the Socialist, but even Henry George has fallen 
into this error. Indeed, it is this error that prevented 
Henry George from adopting Socialism and left him the 
distinguished founder of an inadequate philosophy. For 
the most superficial knowledge of history will suffice to 
demonstrate its untruth. Human nature has already 
been profoundly changed by law; by the institution of 
marriage, by education, by property. This has already 
been sufficiently discussed to make it unnecessary further 
to comment on it. 1 It does not, however, seem sufficient 
to point out the profound modification of human nature 
by law in the past in order to persuade the bourgeois that 
humanity can still further be modified by law in the 
future; for a thousand instances can be quoted of efforts 

1 Book III, Chapter V. 



SCIENTIFIC ASPECT OF SOCIALISM 365 

to change human nature by law that have failed, and it is 
argued very illogically that because in many instances 
they have failed, they must always fail. Then, too, 
there remains in the minds of all influenced by Herbert 
Spencer, the profound error that society is an organism 
and must be allowed to grow; whereas on the contrary, 
a very little study demonstrates that society differs from 
an organism in essential points. 1 

No society can exist without some law of association. 
The law may be a natural one, as in the case of myxomy- 
cetes; or it may be an artificial one, as in the case of 
the United States constitution; or it may be both, as 
indeed is the case in every human society. 

This law of association is called " government. " Strictly 
speaking, in a political sense government means only 
that law of association which is promulgated and enforced 
by the supreme power of the state; but human society 
is controlled by a double system of laws— one written, 
whether in judicial decisions or in express statute, and the 
other not written, because it resides in the mass of the 
citizens under conditions which baffle description. This 
last is imperfectly rendered in the English word " custom," 
is more definitely expressed in the French word moeurs, 
and is admirably conveyed by Horace in the words 

Quid leges sine moribus 
Vanae proficiunt? 

The essential characteristic of custom is that, however 
controlling it may be in fact, it does not enjoy the sanc- 
tion of legislative enactment or executive decree; indeed, 
it often arises out of opposition to law; as where in the 
Western states game laws remain unenforced, because 

1 " Introduction to the Study of Sociology." Herbert Spencer, 
Chapter III. 



366 WHAT SOCIALISM IS 

public opinion supports the ranchman's defence of neces- 
sity; and sometimes again where, though a law be in 
itself proper, a community declines to avail itself of the 
law, as in the custom that discredited divorce in the early 
Roman Republic. 

Now, the importance of this moral or sometimes 
immoral sense that makes custom independently of law, 
must not be underestimated — for it is in many respects 
superior to law for evil or for good; and it differs from 
law in the essential fact that it grows almost imper- 
ceptibly, whereas law, in the strict sense of the word, 
is the result of judicial decision or legislative enactment — 
both acts of deliberation — or so purporting to be. The 
question naturally arises then whether, in so far as society 
develops along the line of custom, it does not follow the 
process of growth rather than that of construction. 

It is impossible to deny that custom and public opinion 
are in a continual state of change; the varying fortunes 
of political parties sufficiently testify to this; but how 
far these variations are in civilized communities due to 
unconscious growth and how far to conscious effort it is 
not easy to determine. Suffice it to point out that, 
while opposing forces such as egotism and philanthropy, 
do continually tend to mould opinion under conditions 
that baffle inquiry, there are conscious forces at work 
which are quite as powerful and could be made more so. 
Chief amongst these is education; and in the word "edu- 
cation" are included not our schools and universities 
alone, but all the educating influences of the day — the 
press, the stage, music, literature, and art. That all 
these are engaged in moulding public opinion — some in 
bringing popular government into contempt, some in 
relaxing public morals, some in holding up low ideals, 
some in indulging luxurious tastes, while they could be 



SCIENTIFIC ASPECT OF SOCIALISM 367 

doing just the opposite of all these things — there is no 
doubt. 

The existence of these things is mentioned here because 
failure to mention them would have left the discussion 
incomplete. Enough has been said to indicate that there 
are great forces at work in society which to-day escape the 
control of government, and that it is not easy to say 
how far they operate after the haphazard fashion of 
Nature and how far subject to the deliberate purpose of 
man. Whatever be the conclusion, it is certain that so 
far as they are left to Nature's guidance they will result 
in Nature's handiwork; whereas so far as they are con- 
trolled by human wisdom they will bear the fruits of that 
wisdom. 

In conclusion, therefore, associations of individuals are 
characterized in primitive forms of life by unconscious- 
ness; but as the individuals develop, these associations 
seem to become deliberate rather than unconscious, until 
in man they not only seem deliberate but are so. 

The history of human society shows that when it has 
been allowed to grow unconsciously the development has 
been in the same direction as under the predatory system 
of Nature; that is to say, institutions have been moulded 
to benefit individuals presenting the combination of 
strength and craft best fitted to survive in the artificial 
environment which the strong and crafty created to that 
end. When conditions produced by this system of growth 
under the spur of egotism were replaced by one of con- 
struction under the guidance of wisdom, there was 
progress. 

Society is controlled by two forces: one which it con- 
sciously set up for itself, called " government"; one which 
is unconsciously operating through the silent struggle of 
natural and non-natural motives in the individual lives 



368 WHAT SOCIALISM IS 

of every one of us. The latter to a great extent escapes 
the control of government; but in so far as society does 
consciously create its own institutions, it ought to be 
engaged in the process of construction and in the conscious 
effort towards self-improvement. To this extent society 
is not an organism, and a fortiori government is not an 
organism either. 

Society, then, is not an organism. 

It differs from an organism in the following essential 
particulars : 

The units of an organism have no individual existence; 
they are parts essential to the whole and exist for the 
sake of the whole. 

The units of a society have an individual existence; 
and, in the case of human society, do not exist for the 
sake of the society, but society for the sake of the indi- 
vidual. 

Not only have the units of a society each an individual 
existence, but they have each an individual will, an 
independent consciousness, and, all except Materialists 
will add, an individual soul. The units of an organism 
are conspicuously without any of these essential at- 
tributes. 

But society, though not itself an organism, is an asso- 
ciation of organisms. And although human society 
seems to resemble a machine more than an organism, the 
legislator cannot for a moment afford to forget that the 
parts of his machine are not inanimate inorganic matter, 
but organic living beings, endowed with the faculties of 
consciousness and will — and above all alive to pleasure 
and sensitive to pain. Nor can he afford to forget that 
the efficacy of all laws depends ultimately upon the 
consent of those upon whom they are to operate; and 
that therefore no law can be effectual that is not supported 



SCIENTIFIC ASPECT OF SOCIALISM 369 

by public opinion. Now, public opinion is the result of 
all the forces acting in the social field, unconscious as well 
as conscious; so that while the aim of the legislator should 
be to replace unconscious growth so far as is possible by 
conscious construction, he commits a fatal error if he 
fails to recognize that men and women are to-day actuated 
as to nine-tenths of their thoughts and deeds by habit, 
and many — perhaps the majority of them — incapable of 
conscious deliberate self-restraint at all. Legislation 
therefore that seeks suddenly to exact of the public a 
greater capacity for self-restraint than it is capable of, 
cannot but prove ineffectual; and ineffectual legislation 
is bad, because it tends to bring legislation into con- 
tempt. Prohibition furnishes a good illustration of this 
principle: in those States in which Prohibition is sup- 
ported by public opinion it operates advantageously; 
where it is not so supported it operates only as an in- 
strument of blackmail. Obviously Prohibition has di- 
minished crime and improved social conditions in some 
States, whereas every attempt to force it or anything 
approaching to it upon the city of New York has resulted 
in the corruption of the police engaged in enforcing it, 
or in prompt punishment for the political party re- 
sponsible for its enactment. The helplessness of mere 
laws to eradicate defects of temperament is one of the 
facts which tend to support the theory of laissez faire; 
but the argument that because under certain conditions 
legislation is inadequate, therefore legislation is always 
inadequate, is too obviously illogical to need refutation. 
It could hardly have received a moment's consideration 
had it not been bolstered by pseudo-scientific conclusions 
drawn from an alleged identity between society and organ- 
isms. But even if society were an organism, this argument 
would still be incorrect; just as incorrect as though it were 



370 WHAT SOCIALISM IS 

contended that because under certain conditions medicine 
is inadequate, medicines must always be avoided, Were 
society as subtle and difficult to treat as the human 
bodies of which it is composed, it would still be the duty 
of the legislator to study the one, just as the physician 
studies the other, with a view to determining the limits 
as well as the extent of his resources. 

But society is not an organism; on the contrary, the 
more human and civilized it is, the less it conforms to 
unconscious growth and the more it yields to intelligent 
purpose. That it is composed of organisms, however, 
sets a limit to the wisdom of interference which it is of 
paramount importance that we should carefully define. 

These limits seem roughly to be marked out by two 
essential factors: one is the purpose of legislation — or 
justice, the other is the obstacles to legislation — or 
national character. Government in aiming at justice 
has to recognize defects of character. The justice which 
can be attained in one community could not be attempted 
in another; that which could be attained in one commu- 
nity in one stage of its development, it would have been 
folly to attempt at an earlier one. The approach to per- 
fection in social conditions depends essentially upon the 
approach to perfection attained by the individuals of 
which the society is composed. 

How nearly a government can attain perfection de- 
pends, then, upon the individual character of those 
subject to it; and how nearly the individual character 
can attain perfection depends to a great extent upon the 
government to which it is subjected. These two factors 
cannot be treated apart; one is a function of the other. 
Just as a physician has in treating a patient to consider 
the hygienic conditions which surround him, and the 
peculiarities of constitution which may make a sudden 



SCIENTIFIC ASPECT OF SOCIALISM 371 

change of these conditions injurious, so a legislator in 
framing laws for a community and thus changing the 
conditions of its environment, has to consider the tem- 
perament of the community and its fitness to undergo 
the proposed change. This is one of the limits that 
Nature puts to legislation, and it is upon a just appre- 
hension of it that the wisdom of legislation depends. 

Although the extent to which legislation can modify 
nature depends largely upon the individuals who com- 
pose the community, there are, nevertheless, certain rules 
that can be laid down applicable by and large, to the 
whole community. 

When a trainer desires to subdue a wild beast, the 
first thing he does is to diminish his rations. So long as 
the carnivorous passions of the lion are kept whetted all 
attempt to control him fails. Or to use a more homely 
illustration, when we want to break a high-spirited colt, 
his supply of oats is lowered. To give such an animal 
an unlimited amount of oats and then to seek to control 
him with a powerful harness would be a mistake. If the 
the harness left him free to move at all, he would kick 
the harness to pieces. Every trainer knows that if a 
horse is refractory, the first thing to be done to give 
him habits of docility is to reduce his rations of grain 
and to feed him on a less stimulating diet. 

This simple and universally admitted principle is, 
however, singularly neglected in our social and political 
institutions. These proceed upon the opposite plan; 
that is to say, they whet the appetite of man to the 
utmost by offering the largest rewards to the most crafty, 
the most greedy, the most dishonest, and the most mer- 
ciless of men, and then legislatures, for the most part 
elected by these very men, are expected to control their 
craft, greed, dishonesty, and mercilessness. 



372 WHAT SOCIALISM IS 

Thus while the competitive system, by making money 
the main object of human existence, drives men to 
gambling and crime, we maintain an elaborate system of 
police courts, penitentiaries, and prisons for suppressing 
these things, although the experience of all recorded 
history demonstrates that these methods are totally 
ineffectual. By overworking our wage-earners, we give 
them an insatiable thirst for drink; we entrust the sale 
of liquor to private individuals; we give these last the 
keenest motive for forcing the sale of liquor on a community 
alas, too eager to buy it, and then we attempt by the 
license system to control drunkenness. We leave our 
currency, which is the lifeblood of our industrial system, 
in the hands of men entitled under our law to consider 
this currency a mere method of increasing their private 
wealth; we offer to these men monopolies of trans- 
portation, of water, of gas, from which they can make 
gigantic fortunes and through which they can control 
our politics, and then we expect the very legislatures they 
control, the very legislators they elect, and the very 
officers they appoint, to control them. Obviously, if 
we begin by putting our legislature into the hands of the 
men whose interest it is to use that legislature to ex- 
ploit us, we ought not to be surprised if the laws enacted 
by these legislatures fail to "change human nature/ 7 

If, however, these appetites were never awakened, or 
if they were only sufficiently tolerated to produce healthy 
activity; if the " brotherhood of man" ceased to be a 
formula and became a fact; if men were educated from 
the cradle to believe that cooperation resulted in more 
economy, liberty, and happiness than competition; if 
cooperative habits were created so that men instinctively 
cooperated with one another instead of fighting with one 
another, can it be doubted that the laws enacted to pro- 



SCIENTIFIC ASPECT OF SOCIALISM 373 

duce this change in our human conditions would have a 
profound effect upon human nature? 

The natural environment has produced the lion, the 
tiger, and the ape. The artificial or human environment 
has produced man. But man is still a competitive animal. 
The next step that we have to take is still further so to 
modify our artificial environment as to make him a 
cooperative animal; to suppress the excessive competi- 
tion that to-day promotes hatred, leaving enough to 
spur activity; to introduce enough cooperation to create 
habits of mutual helpfulness, yet not so much as to sup- 
press individual initiative. 

This effort does not involve any sudden revolution in 
our development; it is only an intelligent continuation 
of the process already begun. We have diminished the 
ferocity of the carnivora in men; we have still further 
to diminish it without impairing courage. If we keep 
in mind that the object of political effort should be to 
diminish unhappiness and increase happiness, we shall 
conclude that this can best be done by continuing to 
develop along this line; by eliminating the eagerness 
created by the competitive system that makes success 
indispensable, not only to luxury and comfort, but to 
health and life; and that by modifying our institutions 
in the direction indicated in the foregoing pages, we shall 
not only secure a larger measure of happiness, but we 
shall so modify type as to change habits and change 
ideals. 

In a word, Science teaches us that we are and must 
be creatures of our own environment. History teaches 
us that we have moulded and can mould our own en- 
vironment. By this inestimable power, man can deter- 
mine the development of the human type. By main- 
taining existing conditions, we shall continue to produce 



374 WHAT SOCIALISM IS 

the type of grasping millionaires that the community 
at large in its heart abhors. Whereas, by modifying 
the environment by the substitution of cooperation for 
competition in the measure above described, we shall 
create a type that humanity has set up in all its poetry, 
music, and art, as the type to be desired, respected, and 
loved. 

§ 6. Summary 

In conclusion let us briefly summarize the scientific 
argument for Socialism free from the explanations with 
which in a first presentation of this subject it was nec- 
essary to encumber the text. 

Evolution prior to the advent of man was an uncon- 
scious and therefore indeliberate adaptation of function 
to environment through the survival of the fittest and 
the corresponding destruction of the less fit. Herbert 
Spencer and his school have been misled by this fact 
into a glorification of the competitive system which 
seemed to them the most conspicuous factor in the im- 
provement of type. This school altogether fails to take 
account of two facts of the utmost importance: 

Development under purely natural conditions — prior 
to the advent of man — by no means proceeded alone 
along competitive lines. It also proceeded along co- 
operative lines, so that while the lion, the tiger, and the 
ape are the prevailing types in certain regions, in others 
the prevailing type is the white ant. 

The other equally important fact is that whereas 
evolution under purely natural conditions — before the 
advent of man — was unconscious, indeliberate, and merci- 
less, since the advent of man it has become conscious, 
deliberate, and merciful, to such an extent that in almost 



SCIENTIFIC ASPECT OF SOCIALISM 375 

every essential particular, development has reversed the 
process that preceded the advent of man. Before the 
advent of man, animals were not only the victims of the 
forces of nature, but also their necessary result. Only 
those animals survived that were able to adapt themselves 
to changes of environment. The rest perished. And 
they adapted themselves to changes of environment 
mainly by developing new organs to that end. For 
example, the camel develops pads under its feet to protect 
them from the burning sands, and a reservoir in its 
alimentary canal to furnish water during its wanderings 
in the desert; the hairless hide of the tropical elephant 
becomes covered with thick curly wool when found in the 
Arctic zone. 

When, how r ever, man appears upon the face of the 
earth, all this order changes. The survival of animals 
in the world is no longer determined by changes of climate 
or changes of environment; the survival of the fittest 
is no longer determined by Nature. It is determined by 
Art — by Man. The animals beneficial to man survive; 
the animals detrimental to man perish. Again, man is 
no longer the victim of the forces of Nature; he has be- 
come in great part master of them. The flame that raged 
uncontrollably over the forest and plain, man now puts 
under his kettle to make his tea; the torrent that dev- 
astated the valleys, man now dikes and distributes in 
irrigating ditches, transforming deserts into green fields. 
The fitful flash of the lightning in the heavens man con- 
ducts along a little wire and converts into the steady 
glow of the incandescent lamp. Nor does man any 
longer adapt function to environment. The Esquimau 
of the Arctic regions has not developed a thick curly 
fur; he has clothed himself in the furs of other animals; 
the Arab of the desert has not developed pads under his 



376 WHAT SOCIALISM IS 

feet or a reservoir in his alimentary canal; he rides and 
loads water on the back of the camel already so provided. 
Man is no longer the necessary result of natural environ- 
ment; he makes his own environment. Wherever he 
goes, he makes a climate of his own. In the tropics, he 
builds houses to protect himself from the heat, and 
creates an artificial cold by punkahs, electric fans, and the 
manufacture of ice. In winter, he creates another climate 
by building houses to protect himself from the cold, 
heating them with a furnace and lighting them with 
gas and electricity. Most important of all, by the con- 
trol of man over environment, he can determine not only 
his own destiny, but also the destiny of generations to 
come. He can by preserving the competitive conditions 
that exist, go on developing the base type that is now the 
necessary result of these conditions — the type that seeks 
happiness regardless of the happiness of others, such as 
our oil kings and railroad kings, steel kings and other 
so-called captains of industry. By substituting coopera- 
tion for competition, he can, on the contrary, develop 
a noble type that seeks happiness through the happiness 
of others, such as the settlement worker and the Little 
Sister of the Poor, with, however, this amazing difference: 
that whereas to-day those who rejoice in social service 
for its own sake are for the most part humble and obscure, 
and those who use social service for their own advance- 
ment are wealthy and illustrious, in a cooperative com- 
monwealth the genius that now goes into competitive 
business will be drawn into the service of the cooperative 
commonwealth. The present alliance between ability 
and craft will be broken up and a new partnership en- 
couraged between ability, wisdom, and unselfishness. 

The fact that all life must adapt itself to environment 
has been felt from the earliest dawn of civilization. Plato 



SCIENTIFIC ASPECT OF SOCIALISM 377 

stated it in the Republic. If justice is to be attained, 
according to Plato it can only be attained under a just 
form of government. The whole history of man since the 
days of Plato has demonstrated that every change in the 
condition of man can be traced as the direct result of 
change of environment — economic, political, ethical, and 
religious. The demonstration that this not only is so but 
must be so was left to science. And the contribution of 
science to Socialism is the demonstration of the fact that 
man can create his own environment — can take those 
elements in competition which are good and eliminate 
those which are bad — can take those elements in coopera- 
tion which are good and eliminate those which are bad; 
and by thus constructing his environment through wisdom 
and art, determine whether the type perpetuated by this 
environment is to be noble or base. 



CHAPTER V 

ETHICAL ASPECT OF SOCIALISM 

The ethical aspect of Socialism is a practical continu- 
ation of the argument of the last chapter, and brings 
us to the crowning glory of Socialism: that it alone can 
and does reconcile the conflict between science, economics, 
and religion. 

§ 1. The Conflict between Science and Religion 

Science produces convictions founded on fact. Re- 
ligion imposes convictions founded on faith. If Religion 
confines itself to matters of faith — to the supernatural — 
it need not come into conflict with Science. But when 
it trespasses on the realms of Science — when it begins to 
deal with matters of fact — it creates a conflict with 
Science in which Science must in the end be victorious. 
Thus when the Church ventured to make it a matter of 
faith that the sun revolves around the earth, it might 
secure the recantation of Galileo, but it had in the end to 
yield before the demonstrations of astronomy. 

This element of conflict between the church and the 
state is disappearing and is bound entirely to disappear. 
The church is more and more confining itself to super- 
natural matters which are properly within the domain of 
faith. So long as it does this, it need not clash with 
Science. 

378 



ETHICAL ASPECT OF SOCIALISM 379 

There is, however, another occasion of conflict between 
Science and Religion more modern than the former and 
more real: The doctrine of evolution in attacking the 
theory of special creation needed at one time to attack 
the existence of God; and as interpreted by Herbert 
Spencer and his school, gave rise to the doctrine that 
" because, on the whole, animals and plants have advanced 
in perfection of organization by means of the struggle for 
existence and the consequent 'survival of the fittest/ 
therefore men in society, men as ethical beings, must 
look to the same process to help them towards per- 
fection/' l 

This notion, which Huxley describes as the fallacy that 
at that time pervaded the so-called " ethics of evolution/' 
raised an issue not only with the church, but with the 
fundamental principles of religion. For if, in fact, the 
blind process of evolution proceeding through the sur- 
vival of the fittest and the destruction of the unfit, was 
the only process to which man could look for his develop- 
ment, then there is no need of a God, and what is far more 
important, there is no need for either human responsibility 
or human effort. Now the church, however much its 
sects may differ in other matters, has always been united 
in teaching not only the existence of a God, but the 
responsibility of man to God, and a duty of man to make 
the effort necessary to comply with his commandments. 
It is to the pages of Huxley that we must turn to see 
this Spencerian fallacy refuted. 

Huxley pointed out that a gardener in growing things 
beautiful and useful to man proceeded in violation of the 
principles of evolution. The characteristic feature of 
what he calls the " cosmic process/' that is to say, evolu- 
tion prior to the advent of man, " is the intense and un- 

1 " Evolution and Ethics," by T. H. Huxley, p. 80. 



380 WHAT SOCIALISM IS 

ceasing competition of the struggle for existence." The 
characteristic of evolution since the advent of man is 
"the elimination of that struggle by the removal of the 
conditions which give rise to it." x 

The immense importance of these considerations is 
that they demonstrate no less important a fact than that 
Man is to-day the selecting agent and not Nature; and 
Man, by replacing evolution by Art converts things which 
in the domain of Nature are not edible, such as kale, into 
things which under Art become edible, such as cabbage. 

But let us now take up the story as told by Huxley: 

"Let us now imagine that some administrative au- 
thority, as far superior in power and intelligence to men, 
as men are to their cattle, is set over the colony, charged to 
deal with its human elements in such a manner as to assure 
the victory of the settlement over the antagonistic influ- 
ences of the state of nature in which it is set down. 
He would proceed in the same fashion as that in which 
the gardener dealt with his garden. In the first place, he 
would, as far as possible, put a stop to the influence of 
external competition by thoroughly extirpating and ex- 
cluding the native rivals, whether men, beasts, or plants. 
And our administrator would select his human agents, 
with a view to his ideal of a successful colony, just as 
the gardener selects his plants with a view to his ideal 
of useful or beautiful products. 

11 In the second place, in order that no struggle for the 
means of existence between these human agents should 
weaken the efficiency of the corporate whole in the 
battle with the state of nature, he would make arrange- 
ments by which each would be provided with those 
means; and would be relieved from the fear of being 
deprived of them by his stronger or more cunning fellows. 

1 " Evolution and Ethics," p. 13. 



ETHICAL ASPECT OF SOCIALISM 3S1 

Laws, sanctioned by the combined force of the colony, 
would restrain the self-assertion of each man within the 
limits required for the maintenance of peace. In other 
words, the cosmic struggle for existence, as between 
man and man, would be rigorously suppressed; and 
selection, by its means, would be as completely excluded as 
it is from the garden. 

u At the same time, the obstacles to the full development 
of the capacities of the colonists by other conditions of 
the state of nature than those already mentioned, would 
be removed by the creation of artificial conditions of 
existence of a more favorable character. Protection 
against extremes of heat and cold would be afforded by 
houses and clothing; drainage and irrigation works 
would antagonize the effects of excessive rain and excessive 
drought; roads, bridges, canals, carriages, and ships 
would overcome the natural obstacles to locomotion and 
transport; mechanical engines would supplement the 
natural strength of men and of their draught animals: 
hygienic precautions would check, or remove the natural 
causes of disease. With every step of this progress in 
civilization, the colonists would become more and more 
independent of the state of nature; more and more, their 
lives would be conditioned by a state of art. In order to 
attain his ends, the administrator would have to avail 
himself of the courage, industry, and cooperative intel- 
ligence of the settlers; and it is plain that the interest 
of the community would be best served by increasing the 
proportion of persons who possess such qualities, and 
diminishing that of persons devoid of them. In other 
words, by selection directed towards an ideal. 

"Thus the administrator might look to the establishment 
of an earthly paradise, a true garden of Eden, in which all 
things should work together towards the well-being of 



3S2 WHAT SOCIALISM IS 

the gardeners; within which the cosmic process, the 
coarse struggle for existence of the state of nature, should 
be abolished; in which that state should be replaced by 
a state of art; where every plant and every lower animal 
should be adapted to human wants, and would perish 
if human supervision and protection were withdrawn; 
where men themselves should have been selected with a 
view to their efficiency as organs for the performance of 
the functions of a perfected society. And this ideal 
polity would have been brought about, not by gradually 
adjusting the men to the conditions around them, but 
by creating artificial conditions for them; not by allowing 
the free play of the struggle for existence, but by exclud- 
ing that struggle; and by substituting selection directed 
towards the administrator's ideal for the selection it 
exercises. " x 

And this is not confined to physical things, but is 
extended to moral. "Social progress," he says, "means 
a checking of the cosmic process at every step and the sub- 
stitution for it of another, which may be called the ethical 
process; the end of which is not the survival of those 
who may happen to be the fittest, in respect of the whole 
of the conditions which obtain, but of those who are 
ethically the best." 2 And this leads to the final con- 
clusion: 

"As I have already urged, the practice of that which 
is ethically best — what we call goodness or virtue — 
involves a course of conduct which, in all respects, is 
opposed to that which leads to success in the cosmic 
struggle for existence. In place of ruthless self-assertion 
it demands self-restraint; in place of thrusting aside, or 
treading down all competitors, it requires that the 
individual shall not merely respect, but shall help his 

^'Evolution and Ethics, p. 20." 2 Ibid., p. 81. 



ETHICAL ASPECT OF SOCIALISM 383 

fellows; its influence is directed, not so much to the sur- 
vival of the fittest, as to the fitting of as many as possible 
to survive. It repudiates the gladiatorial theory of ex- 
istence. It demands that each man who enters into the 
enjoyment of the advantages of a polity shall be mindful 
of his debt to those who have laboriously constructed it; 
and shall take heed that no act of his weakens the fabric 
in which he has been permitted to live." * 

Further on, he repeats : 

" Let us understand, once for all, that the ethical prog- 
ress of society depends, not on imitating the cosmic 
process, still less in running away from it, but in com- 
bating it." 2 

And later on: 

" I see no limit to the extent to which intelligence and 
will, guided by sound principles of investigation, and 
organized in a common effort, may modify the conditions 
of existence, for a period longer than that now covered 
by history. And much may be done to change the nature 
of man himself. The intelligence which has converted 
the brother of the wolf into the faithful guardian of the 
flock ought to be able to do something towards curbing 
the instincts of savagery in civilized men." 3 

And in a note Huxley emphasizes the extent to which 
human nature has been already modified by pointing to 
the fact that sexual instinct has been suppressed between 
near relations. 4 

Huxley's demonstrations that the happiness of man 
can only be attained by the limitation of competition, by 
deliberate institutions to that effect, and by conscious 
efforts to create an environment that will tend to develop 
the ethical qualities of men, put an end to the last 

1 "Evolution and Ethics," p. 81. 3 Ibid., p. 85. 

2 Ibid., p. 83. * Ibid., p. 116. 



384 WHAT SOCIALISM IS 

serious occasion for conflict between Science and Religion; 
for it results in the same theories of human responsibility, 
and the same appeals to human effort, that it has been 
the role of the church to preach from the beginning. 

I have quoted from " Evolution and Ethics" because to 
my mind this essay and its prolegomena make Huxley 
the founder of Scientific and Ethical Socialism. It is 
true that he himself repudiates this. To him Socialism 
is impossible because of what he describes as " the mighty 
instinct of reproduction." x He points out that we can- 
not apply to superfluous or defective human beings the 
system of extirpation which gardeners apply to super- 
fluous and defective vegetables and weeds. 

I have already answered the objection to Socialism on 
the ground of overproduction. 2 But Huxley never had 
presented to him the modern idea of Socialism herein 
described. He speaks of the "elimination of competi- 
tion." It never occurred to him that the evils of com- 
petition could be eliminated without eliminating com- 
petition. Candor, however, compels me to admit that 
I do not think any presentation of the most modern form 
of Socialism would at all have converted Professor 
Huxley. There were two subjects upon which he could 
not speak without getting into a temper: Gladstone and 
Socialism. 

When I met him, I was not myself a Socialist. Indeed, 
I did not become a Socialist until after Huxley died. My 
impressions, therefore, of him were not affected by a 
prejudice in favor of Socialism. On the contrary, I still 
regarded Socialism as impractical; I still believed it 
to be absurd. It was only after months of labor in 
attempting to utilize the "considerable fragments of a 

1 "Evolution and Ethics," p. 20. 

2 Book II, Chapter I. 



ETHICAL ASPECT OF SOCIALISM 385 

constructive creed" 1 which Professor Ritchie found in 
Professor Huxley's pages, that I was driven to a study 
of the Socialism to which I was utterly opposed, and 
found in it the only solution to the contradictions which 
blurred even the lucid pages of Huxley's works. And 
the contradictions in Huxley are not difficult to find. 
Nothing could be more pessimistic than what seems 
to be the climax of his argument in " Evolution and 
Ethics": 

"The theory of evolution encourages no millennial 
anticipations. If, for millions of years, our globe has 
taken the upward road, yet, some time, the summit will 
be reached and the downward route will be commenced. 
The most daring imagination will hardly venture upon 
the suggestion that the power and the intelligence of man 
can ever arrest the procession of the great year." 2 

And yet, on the very next page, he closes this essay 
with a note of the serenest optimism: 

"So far, we all may strive in one faith towards one 
hope." 3 And the keynote of his attitude towards this 
subject is to be found in a passage in which he "thinks 
it unjust to require a crossing-sweeper in Piccadilly to 
tell you the road to Highgate; he has earned his copper if 
he had done all he professes to do and cleaned up your im- 
mediate path"; and a little later where he " shudderingly 
objects to the responsibility of attempting to set right 
a world out of joint." 

Now Socialists have the audacity to maintain that it 
is not beyond the intelligence of the crossing-sweeper 
of Piccadilly to know and tell the road to Highgate, 
and that the time has come when no one has a right 

1 "Government or Human Evolution," Vol. I, p. 16. 

2 "Evolution and Ethics," p. 85. 

3 Ibid., p. 86. 



386 WHAT SOCIALISM IS 

to " shudderingly object to the responsibility of at- 
tempting to set right a world out of joint/' 

Huxley builded better than he knew; and in spite of 
his detestation of Socialism it was he who built its 
strongest and most enduring foundation; for unanswer- 
able as may be the economic argument in favor of Social- 
ism, it might take centuries to prevail if there were 
not an equally strong scientific and ethical argument 
for it. 

The moment that Huxley recognizes that it is by the 
"elimination of competition/' or shall we say the "limit- 
ation of competition," by substituting human selection 
for natural selection, and directing selection towards 
an ideal that man is to progress and develop, he has 
recognized the scientific basis of Socialism; and when 
he points out that Science teaches self-restraint, human 
responsibility, human effort, not so much the "survival 
of the fittest" as fitting as many as possible to survive, 
he has reconciled Science and Religion. 

It is probable that one of the reasons why Huxley took 
a pessimistic view of the future was that he despaired of 
finding a solution to the economic struggle. I cannot 
forget the melancholy with which he said one day: "I 
am informed that England keeps its control of the market 
of cotton goods by a difference in cost of production of 
a farthing per yard. How long can this last?" But 
Huxley only gave a part of the scientific argument for 
Socialism. For the other part we have to turn from the 
pages of Huxley to those of Karl Marx. 

One of the most important services Karl Marx ren- 
dered humanity was the demonstration of the pre- 
dominating influence of economics in the development 
of man, in the determining of our custom, character, and 
conduct. 



ETHICAL ASPECT OF SOCIALISM 387 

The economic conception of history is described by 
F. Engels as follows: 

"The materialist conception of history starts from the 
principle that production, and next to production the 
exchange of its products, is the basis of eve^ social sys- 
tem; that in every society arising in history the allotment 
of products, and with it the division of society into classes 
or ranks, depends upon what is produced, how it is pro- 
duced, and how when produced it is exchanged. Ac- 
cordingly the ultimate causes of all social changes and 
political revolutions are not to be looked for in the heads 
of men, in their growing insight into eternal truth and 
justice, but in changes of the methods of production and 
exchange; they are to be looked for not in the philosophy, 
but in the economy of the epoch in question." x 

Before elaborating this conception of history, it may 
be well to point out one or two elements of confusion 
in the terms in which it is stated. It is described as the 
"materialist conception of history," and for this reason 
many people imagine that the admission of this theory 
means the exclusion of the ideal. This is a profound 
error due to a misunderstanding of the use of the word 
"materialist." This word does not necessarily imply 
that the only proper conception of history is a material- 
istic one in the sense that it excludes the operation of 
ideals; but only that material conditions have played a 
predominating role in determining ideas. 

The admission, however, must be made that this 
explanation is by no means admitted by all Socialist 
writers. Indeed the very language used by Engels is 
inconsistent with it. He says "they are not to be looked 
for in the philosophy, but in the economy of the epoch 
in question." If, however, Mr. Engels were alive to-day 

1 "Modern Socialism," by R. C. K. Ensor. 



388 WHAT SOCIALISM IS 

and were challenged as to whether in fact he meant by 
this phrase to exclude philosophy altogether, I think he 
would answer in the negative. What he meant to say, 
I think, was that the ultimate causes of all social changes 
and political revolutions are to be looked for in the 
economy of the epoch rather than in its philosophy. 
And this, I think, with some limitation is true, for the 
philosophy of every period is to a large extent determined 
by its economic conditions. 

To this general statement there are, however, notable 
exceptions. Some men either by the adequacy of their 
means or the smallness of their needs, are lifted entirely 
above economic conditions, so that they can reason 
abstractly without regard to economic conditions. This 
probably is true of almost every philosopher that has 
made his mark. It is impossible to read the words of 
Christ, of Plato, Aristotle, St. Thomas Aquinas, Carlyle, 
Emerson, and Tolstoi without being impressed by the 
fact that they soared far above all economic considera- 
tions. 

On the other hand, economic conditions had a con- 
trolling influence on the whole philosophy of Ruskin. 
His first contact with life was while travelling with his 
father, who sold sherry to wealthy county families, and 
approached their mansions by way of the butler's pantry. 
This impregnated Ruskin with a cult for aristocracy. 
It made it impossible for him to consider popular govern- 
ment without impatience. 

Economic conditions too had put their mark so inef- 
faceably on the mind of Huxley that although in his 
criticism of Herbert Spencer he destroyed the principal 
philosophic bulwark of capitalism, he could not talk on 
Socialism without irritation. 

Thus although men as great as Ruskin and Huxley 



ETHICAL ASPECT OF SOCIALISM 389 

were unable to rise above the slavery of the economic 
conditions in which their minds had been formed, others 
are so constituted as to be able to discuss ethics without 
any regard to economic conditions whatever. There is, 
however, no doubt as to the dominating influence of 
economic conditions in determining the average mental 
attitude. 

Man had two dominating appetites — for food and for 
perpetuation; and of these, because that for perpetuation 
is fitful whereas that for food is continuous, the latter is 
the more determining of the two. There is hardly an 
act in a man's life which is not determined by the needs 
of food in the first place and the search for food in the 
second. This is admitted by all sociologists. 

A right understanding of economics is therefore of the 
utmost importance to the conscious development of 
man. Unfortunately economists themselves have been 
until very lately just as narrow in their disregard of 
science and religion as science and religion have been 
narrow in their disregard of economics. Let us consider 
as briefly as the subject permits the inconsistencies which 
result from this narrowness in regard to religion and 
economics. 

§ 2. Conflict between Economics and Religion 

It is said that by the side of every poison in Nature 
there grows its antidote; that for every bean of St. 
Ignatius there is a bean of Calabar; and that a man poi- 
soned by the one has only to stretch his hand out to the 
other. 

So also in our social system may the two influences be 
at work, at odds with each other; whereas, did we but 
know enough, they might not only serve to counteract 



390 WHAT SOCIALISM IS 

one another, but even become a priceless boon to humanity, 
as indeed the beans of St. Ignatius and Calabar have 
been made to yield up drugs as useful as nux vomica and 
eserine. 

Religion and economics start by assumptions that are 
glaringly inconsistent. 

Religion proceeds upon the assumption that man has 
morality in him and will, sometimes, act morally even 
contrary to his material interests. 

Economics proceed upon the assumption that man has 
no morality in him and will never act morally if morality 
be contrary to his material interests. 

Modern economists have somewhat modified this last 
view, but I am not criticising modern Political Economy, 
which is already lowering its flag to new doctrine; I am 
criticising the doctrine of laissez faire, which still con- 
stitutes the backbone of our existing economics and will 
continue to deform our economic ideas until that back- 
bone is relegated to museums by the side of the Ichthyo- 
saurus and the Iguanodon. 

Is the assumption that economic science is uninfluenced 
by morality true or false? Undoubtedly an economic 
science can be and has been constructed which does 
ignore morality and, dealing with man not as he really 
is but stripped of his morality, or as he is termed by some 
economic writers, " economic man," and still more 
naively by others the " average sensual man," has laid 
down the laws which for such a man govern the produc- 
tion, distribution, and accumulation of wealth. In the 
development of this science it has been found necessary 
to define wealth, and here we come upon the first hard 
substance against which economists have broken their 
heads. For obviously wealth is to the " economic" 
or " average sensual" man a totally different thing to 



ETHICAL ASPECT OF SOCIALISM 391 

what it is to a Diogenes, a Cato, or to a Sister of Charity. 
To the latter wealth or well-being as opposed to illth 
or ill-being, consists mainly in the opportunity to be 
helpful to our fellow-creatures, whereas to the average 
sensual man wealth means money or the things that 
represent money, produce, bonds, and shares of stock. 
Now all economists are not " average sensual" men; 
it is doubtful whether to those who know the Dean of 
Modern Economists, Mr. Alfred Marshall, he can be de- 
scribed as a sensual man at all; and so there are few 
subjects upon which economists have differed so much 
as upon the definition of wealth. The extremists con- 
fine wealth to material things that have an exchange 
value; but the absurdity of such a definition is slowly 
making itself recognized; thus it has been forced upon 
some that skill is wealth; and upon others that honesty 
too is wealth; for the money value of honesty is now 
put into dollars and cents by surety companies. And 
so very slowly but surely economists are beginning to 
recognize that man is a moral as well as a sensual animal, 
and that his morality cannot be disregarded even by 
economics. 

Then, too, what is wealth in one country is not wealth 
in another; thus we are told that the food of John the 
Baptist was " locusts and wild honey," and in certain parts 
of Africa locusts are still a marketable article of food; 
so snails are wealth in France though not in England; 
and human flesh which is not wealth in Europe is still 
wealth in some parts of Africa, Wealth then depends 
upon two factors: intrinsic and extrinsic; the first in^ 
eluding qualities of the thing itself, the second depending 
upon human demand; so that a painting by Tintoretto 
is wealth to a community that loves art, but an encum- 
brance to one that does not love it ; and absinthe, that is 



392 WHAT SOCIALISM IS 

regarded as a valuable asset in France, is excluded by 
Belgium as poison. 

Here again we come up against the morality of man; 
will he continue to poison himself with absinthe or will 
he abstain? Upon this ethical decision will depend the 
question whether the immense stock of absinthe now on 
the French market is wealth or not. And so we are 
led insensibly to a question of still wider importance: 
Is wealth money or is it happiness? If it is money then 
economists are right; if it is happiness then they are 
wrong. And yet it is as clear as the sun on a cloudless 
day that what man wants is happiness, and that if he 
has been set all these centuries on seeking money it is 
because money is believed by him to be practically the 
only medium through which he can attain happiness. 
Here is repeated the old story of the captive beaver in the 
attic gathering sticks to make a dam when the water 
pitcher was upset. The object for making dams had 
disappeared, but the dam-building instinct survived. 
We have grown so accustomed to labor for money that 
we have lost sight of the real object of our efforts; and 
we have to think a long time before we recognize that 
money in itself is of no importance to us whatever; and 
that the only thing of real importance is that for which 
money is sought— happiness. Now what happiness 
consists of depends upon the mentality of any given 
community. The tree-dwelling savage's idea of happiness 
is plenty of nuts and fine weather; the Englishman's 
idea is plenty of land and a seat in Parliament; the 
American's idea is millions of money; and the tree-dwell- 
ing savage is probably as near the truth as either of the 
other two. 

Obviously there is an ideal of happiness quite different 
from this; an ideal that recognizes the solidarity of the 



ETHICAL ASPECT OF SOCIALISM 393 

race and recognizes that no one man can be securely 
happy unless his neighbors are happy also; an ideal built 
on the plan of mutual helpfulness — of cooperation instead 
of competition. But here the lip of the economist will 
curl and he will, if he deigns to express himself at all, 
denounce such a proposition as " impractical/' But why 
does he do this? Because he has been educated to 
believe that economics deal only with the " average 
sensual man," and that wealth consists exclusively of 
" material things that have an exchange value." If, 
then, it turns out that both these assumptions are false, 
is it not time for him to revise his philosophy? 

It is not unnatural that starting with false definitions 
of man and of wealth, economists should arrive at a 
false conclusion regarding the so-called beauties of our 
industrial system, and of such time-honored though im- 
moral maxims as "competition is the soul of trade" and 
" caveat emptor. 77 

And now after this rapid glance at economic philosophy 
and the " average sensual man," let us turn to Religion 
and see how Religion regards man. 

It seems inconceivable that the same civilization should 
include two bodies of men living in apparent harmony 
and yet holding such opposite and inconsistent views on 
man as economists on the one hand and theologians 
on the other. To these last, man has no economic needs; 
this world does not count; it is merely a place of proba- 
tion, mitigated sometimes, it is true, by ecclesiastical 
pomp and episcopal palaces; but serving for the most 
part as a mere preparation for a future existence which 
will satisfy the aspirations of the human soul — the only 
thing that does count, in this world or the next. So 
while to the economist man is all hog, to the theologian 
he is all soul; and between the two the Devil secures 



394 WHAT SOCIALISM IS 

the vast majority. One-fifth of the population in London 
is admittedly foredoomed to die in a penitentiary, an 
almshouse, or a lunatic asylum; and the vast multitude 
of wage earners are kept out on the ragged edge of the 
strike on one hand and unemployment on the other, 
with no better prospect before them than a destitute 
old age. 

Were there no churches in the land, were there no 
charity in man, no pity, the economists would be com- 
prehensible; but with our churches still crowded; with 
charitable societies as thick as universities; with pity 
in their own hearts giving every day the lie to the eco- 
nomic enormities they profess and teach, what are we 
going to say of these men? And were there no econo- 
mists in the chair, no stock exchange, no factory, no 
strikes, no unemployed; did our theologians' stomachs 
never themselves clamor for food, or their bodies cry 
out for shelter and heat, they too would be excusable. 
But with our tenements steeped in misery; with misery 
pitilessly leading to crime, vice, disease; with the de- 
mands of the body brought home to every one of them 
a thousand times a day, is it not time for theologians at 
last to remember that men have bodies as well as souls? 

Consider then these two sets of teachers, one professing 
a philosophy built on the assumption that man is all 
body and no soul, the other built on the contrary as- 
sumption that man is all soul, meeting daily at dinner 
parties and discussing the agony of the workingman with 
complacency and "philosophic calm"! 

Yet if we look at the world as it is, so full of evil and 
yet so easily set right, we will not delve at the roots of 
plants and say: "Life is all mud;" nor point to their 
leaves and say: "Life is all flower and fruit." Life is 
made up of root and flower; man is made up of body 



ETHICAL ASPECT OF SOCIALISM 395 

and soul. The economy and the religion that heed this 
will alone be true. Let economics be enlightened by 
religion and let religion be enlightened by economics; 
let the economist learn that the soul of man is more than 
raiment and the priest that the needs of the body come in 
order of time before the needs of the soul; let the econ- 
omist learn the laws of mutual helpfulness and the priest 
the laws of the production and the distribution of well- 
being; and there will spring into existence a new religion 
and a new political economy that will preach the same 
thing — the solidarity of man — that what man wants in 
this world is not money, but happiness — and that he can 
prepare himself best for the next world of which he knows 
nothing by making his neighbor as well as himself whole- 
some as well as happy, in this world of which he to-day 
alas, knows too much of its misery and too little of its play. 

§ 3. Socialism Reconciles Religion, Economics, and 

Science 

Let us now consider the Scientific and Ethical aspects 
of Socialism from a slightly different angle than that 
which closed the preceding chapter. 

In what Huxley calls the " cosmic process " — the process 
of evolution prior to the advent of Man — the development 
or degeneration of animal or vegetable life is determined 
by the environment. If the environment is favorable 
to development, there is development; if it is unfavorable, 
there is degeneration. The question, therefore, whether 
animal or vegetable life is to develop or degenerate is 
left to the caprice of environment. The process through 
which this caprice is exercised is the survival of the 
fittest, and this includes two processes: the utmost 
propagation on the one hand, and the utmost competition 



396 WHAT SOCIALISM IS 

on the other. With all the cruelty that this system 
involves, it would be idle to call such a process moral; 
nor would it be reasonable to call it immoral. The 
cosmic process is non-moral. It ignores justice because 
justice is a conception of either God or Man, and is not 
found in Nature outside of God or Man at all. 

If now we turn from the cosmic process to that em- 
ployed by the gardener in converting wild land into a 
garden for the purpose of producing things beautiful 
or useful to man, we find that the gardener reverses the 
cosmic process. He does not tolerate utmost propagation 
or even propagation at all except to the extent necessary 
to furnish him beautiful or useful things. He limits 
propagation; and as to utmost competition, he eliminates 
competition altogether. And it is only by limiting 
propagation and eliminating competition that the gardener 
keeps his garden beautiful and useful. The moment he 
stops applying to his garden patch the art which limits 
propagation and eliminates competition, that moment 
the garden tends to return to a state of Nature; to 

"an unweeded garden, 
That grows to seed ; things rank, and gross in nature, 
Possess in merely." * 

It must also be observed that in the garden patch 
selection is not exercised by the environment, though it is 

1 Of course, I must not be understood to mean that nothing 
beautiful or useful grows in Nature outside of the art of the gardener. 
On the contrary, we know that in the Tropics Nature furnishes 
not only beautiful things, but enough of useful things to make 
the art of the gardener unnecessary. The lesson to be drawn 
from the garden patch is that, if the best result in the shape of 
beautiful and useful things is to be obtained from a limited, surface, 
Art must be applied to that surface; Nature cannot be depended 
upon. 



ETHICAL ASPECT OF SOCIALISM 397 

limited by the environment ; selection is exercised by the 
gardener who, within the limits permitted by the envi- 
ronment, replaces Nature. It is no longer Nature that 
selects, but Man. 

Let us now turn from the civilized garden to the 
civilized community. Here, too, we find the cosmic 
process in some respects reversed; in other respects, 
allowed to run riot. It is reversed in the sense of the 
word that prudence created by the ownership of property 
limits the propagation of the educated; but it remains 
unreversed by the fact that despair created by absence 
of property leaves propagation unchecked in the un- 
educated. So that if it be admitted that it would be 
better for type that the educated should propagate than 
the uneducated, the human type is tending to degenerate 
owing to the fact that there is unlimited propagation of 
the least desirable types; whereas there is limited propa- 
gation of the more desirable. 

When we turn to competition, we find it almost unre- 
strained. Indeed, it was the deliberate policy of the 
government and of political economists a century ago 
to let it proceed absolutely without restraint. Such was 
the doctrine of laissezfaire and such is the doctrine which 
to-day is expressed by business men in the request to be 
"let alone." But the experience of the past one hundred 
years has demonstrated that humanity cannot afford to 
let competition go unrestrained; that it leads to such 
fatal consequences that all — even the most educated and 
carefully nurtured — are exposed to the contagion of 
disease engendered by unrestrained competition; witness 
the cholera scare and the hygienic laws to which this 
cholera scare gave rise. 1 Competition has been con- 
trolled in various manners : by laws such as factory acts, 

1 Book III, Chapter II. 



398 t WHAT SOCIALISM IS 

child labor acts, women labor acts; second, by trade 
unions which the community and the law have had to 
protect in order to keep workingmen from the danger of 
having to work for less than starvation wages; and last 
of all, by trusts, which discovered that competition 
involves a waste which, could it be saved, would roll up 
enormous dividends to stockholders. But trusts have 
occasioned evils against which to-day the whole nation is 
crying out. So that the cry now abroad is to control 
monopolies, trusts, and corporations; and if the efforts 
to control corporations have not already sufficiently 
demonstrated that such laws are bound to result in 
more blackmail than control, no reasonable man can 
doubt that they must in the end so result in view of the 
fact that the prizes offered by business attract first-class 
talent to business whereas the smaller prizes offered by 
politics or the government can only draw to it second- or 
third-rate ability. 

I trust it has been shown that the confusion that 
results from the competitive system is due to false 
notions of property; that property as an institution is, 
and must always be, essential to the economic structure 
of the state in the sense that the original and beneficial 
purpose of property is to secure to men as nearly as 
possible the full product of their toil. This is the ideal 
distinctly expressed by Mr. Roosevelt, and is the ideal of 
every mind that has distinct notions about property 
at all. 

Our social structure, therefore, should be so organized 
as to assure to men the full product of their toil by the 
adoption of some such system as has been described in 
the chapter on the Economic Construction of the Co- 
operative Commonwealth. 

In such a social structure, competition would be limited 



ETHICAL ASPECT OF SOCIALISM 399 

so that we should reserve its stimulus and eliminate its 
sting, and propagation would be limited not only by 
prudence, but by the economic independence of women, 
who ought to have most to say on the subject. In such 
a social structure, we should for the first time have an 
environment that would discourage vice and encourage 
virtue. And here comes, as I have already said, the 
crowning glory of Socialism that reconciles religion, 
economics, and science. 

For the Church teaches: "Man is born in sin; his 
passions are sinful; unaided by God he is their slave. 
If, however, he chooses to make the effort necessary to 
secure the aid of God, he can master his passions and 
earn salvation. But although the Grace of God will 
secure to him some happiness in this world, this world 
is a place of unhappiness and purgation; the rew r ard 
of the faithful is not in this world, but in the world to 
come." 

The Economist teaches: "Man is born in sin; his 
passions are sinful; in matters so practical as bread and 
butter we must not allow ourselves to be deluded by the 
promises of the Church, as to the fulfilment of which 
no evidence has ever been furnished. A practical system 
of economics then must be built on the undoubted fact 
that the l average man' is 'sensual' and will always 
act in accordance with what he believes to be his material 
interest. It must be founded on human selfishness; let 
every man be driven by selfishness to make wealth 
primarily for himself and incidentally for the community 
at large. This is the only practical system for the accu- 
mulation of wealth." 

Science says: "Man is born with passions, but are 
these passions sinful? They are sinful when uncontrolled, 
because they may then act injuriously to the neighbor. 



400 . WHAT SOCIALISM IS 

When controlled they act beneficially to the neighbor. 
The problem is not how to suppress passion, but how to 
control it. Man must indeed obey his greater incli- 
nation; but Man has the power to mould his own en- 
vironment; to make his own habits; to make his own 
inclination; Man therefore is master — not slave. There 
is too in evolution a power which from the creation to 
this day has persistently worked toward progress, justice, 
and happiness; but we are still ignorant as to what this 
power is except in so far as we see it working in Man. 
In Man we can see and study the working of this power. 
And we find it in Man's capacity to mould his own 
environment by resisting Nature instead of yielding to 
it. And so science teaches to-day — not the gospel of 
evolution alone — but also the gospel of effort and Art." 

In Nature we observe two systems of social existence: 
one competitive, one cooperative. Both are attended 
by evils; both by advantages. Man can frame his social 
and economic conditions so as to eliminate the evils 
and secure the advantages of both. This is Socialism. 

Socialism leaves the church free to proceed along the 
lines of its faith; but it furnishes the church with the 
inestimable advantage of creating economic conditions 
that make the practice of religion for the first time 
possible. To-day economic conditions by ignoring the 
soul of Man and appealing only to his appetites make the 
practice of the Golden Rule impossible. 

Economic conditions can be so changed that they ap- 
peal to the soul of man without ignoring his appetites. 
It may be that the earth is a place of preparation for 
another life. But it is not for that reason necessarily 
a place of misery and injustice. Socialism by eliminating 
misery and injustice will make this preparation easier. 
The environment of Socialism will tend to improve not 









ETHICAL ASPECT OF SOCIALISM 401 

only the individual, but also the type. It may be that 
the grace of God will help man to be noble and just. 
Let the church continue to teach this. But let science 
be heard also in the positive proof it furnishes that man 
will and must be what the environment makes him; 
that if we continue to tolerate economic conditions that 
appeal to his selfishness, he will and must remain selfish; 
whereas if wiser economic conditions appeal to his un- 
selfishness he will and must tend to be unselfish. 

And so in Socialism and in Socialism alone, do we find 
reconciled the ethics of the church, the needs of eco- 
nomics, and the demands of science. 

The new church will continue to teach social service; 
the new economics will permit of social service; and the 
new science will make of social service an environment out 
of w^hich the new type of man will be evolved that will 
justify the words of Christ: "Hath it not been said in 
your law l Ye are Gods' ?" 



CHAPTER VI 
SOLIDARITY 

I think it was Miss Martineau who said that if her 
generation was better than that which preceded her, 
the betterment was due to the teachings of Garlyle; and 
much though we may differ with John Ruskin in matters 
of detail, no one will dispute the apostolic fervor with 
which he endeavored to push on the work of Thomas 
Carlyle. It is a significant fact, therefore, that both 
Thomas Carlyle and John Ruskin had nothing but abuse 
to give to political economy. Nevertheless, I think we 
all must agree that this hostile attitude was due to a 
misconception of the scope of political economy, a mis- 
conception due in great part to its name; for the words 
"political economy" seem to indicate that it deals with 
the economy of the state, and that it becomes the duty 
of its teachers to show us not only what the rules regard- 
ing the production and distribution of goods are, but 
what they ought to be. 

In fact, however, although economists do discuss how— 
if at all — the system of production and distribution of 
goods can be improved, they have always regarded it 
as their principal function to describe accurately what the 
rules that govern production and distribution really 
are, rather than what they ought to be. And as existing 
industrial conditions are extremely complicated, those 
who have thrown light upon them are highly to be hon- 

402 



SOLIDARITY 403 

ored. And although they have contributed nothing to 
the solution of such problems as unemployment, pauper- 
ism, and the conflict of labor and capital, it may be as 
unreasonable to complain of this as to quarrel with the 
"crossing-sweeper of Piccadilly" because he is unable 
"to tell you the road to Highgate." 

Again, political economy has encountered a great deal 
of unmerited abuse because critics have confounded 
authors with their subject, and have held economists 
responsible for the industrial conditions they describe; 
whereas, these economists have earned our sincerest 
thanks for demonstrating that the competitive system 
offers no solution for the conflict between capital and 
labor, or the problem of unemployment and all the other 
problems as those of pauperism, prostitution, and eco- 
nomic crime which result therefrom. 

Mr. Ruskin is certainly wrong when he denounces 
political economy as the "science of getting rich," and 
when he adds that "persons who follow its precepts" 
do actually become rich; "all persons who disobey them 
become poor"; for our ablest political economists have 
always been and still are relatively poor men, and our 
richest millionaire is a past master of the rules in the 
game which it is his particular business to play; but he 
is not concerned with a science which does no more than 
study wealth under the competitive system and demon- 
strate how inevitably a few grow rich and the rest grow 
poor under it. 

Let us then abandon hostility to a science without 
which to-day we could not see clearly the workings of 
the existing system, and on the contrary, avail ourselves 
of all its teachings, recognizing that a study of what 
industrial conditions to-day are must precede the study 
of what they could and should be. 



404 WHAT SOCIALISM IS 

The study of political economy is necessary to a study 
of " social economy." Political economy admittedly 
deals with the average sensual man, and having deter- 
mined the rules that determine the actions of the average 
sensual man, it becomes now the problem of social economy 
to deal with the average moral man. And the moral 
man must not be regarded as opposed to the sensual. 
The moral man includes the sensual, but adds affection, 
sympathy, and all that makes happiness to the sensual 
man who may, through absence of affection and sym- 
pathy, fail to attain the happiness of which he is in 
search. Under this definition, while political economy 
deals with the attainment of wealth, social economy 
deals with the attainment of happiness; and as man 
must eat before he can pursue happiness, social econ- 
omy must concern itself with the acquisition of wealth 
to satisfy physical needs before it concerns itself with 
the attainment of justice to satisfy moral needs. An 
attempt has been made in this book to present the social 
and economic structure which would best attain happi- 
ness. Would such a system at the same time attain 
justice? 1 

To arrive at a correct notion of justice, we have to 
refer once more to the difference between what Huxley 

1 In a previous attempt to define justice, I have found it neces- 
sary to devote to this subject an entire volume, and I do not believe 
that the subject can be sufficiently discussed in less than such a 
volume. The definition with which I concluded that book has been 
adopted by Mr. Lester F. Ward in his book on Applied Sociology. 
I believe that all other definitions of justice are defective mainly 
because other definitions such as those of Herbert Spencer in his 
book entitled "Justice'' confound justice with liberty. In other 
words, his definition of justice is a definition of liberty, whereas 
justice is more than liberty. Or perhaps it would be more correct to 
say that liberty is one of the elements of justice. 



SOLIDARITY 405 

calls the " cosmic process" — that is to say, the process 
of the environment of Nature before the advent of Man 
— and the ethical process, or the process of the artificial 
environment created by Man. For there is one difference, 
and a most essential difference, between them to which 
attention has not yet been directed: namely, that in 
communities such as those of the bee and ant, the in- 
dividual is sacrificed to the community; whereas the 
effort of Man is or should be to so organize his community 
that it will serve the happiness of the individual. For 
example, we would not tolerate a community upon the 
plan we see practised by the bees, under which only one 
male out of a whole hive is permitted to propagate and 
all the rest of the males on attaining maturity are caused 
to die; only one female of the whole hive is allowed to 
be fertile and to propagate, all the rest being subject to 
the dreary round of keeping the fertile bee a prisoner, 
of feeding her, of rearing, feeding and caring for the young 
in the hive, and incidentally destroying any males who 
may return to the hive from the nuptial flight. We have 
to recognize that the great obstacle to happiness in com- 
munity life is sexual instinct, of which Socialists of the 
type of Edward Bellamy have for the most part failed 
to take account. 

Reference has been made to the various devices adopted 
by different races of animals and by Man at different 
periods and at different places to solve the problem of 
sexual instinct, 1 and it has been, I think, demonstrated 
by Professor Giddings, that of all the systems proposed 
none can compare with our present institution of marriage. 2 
The mere fact that the marriage system has survived 
in the conflict with races that have adopted other 

1 See "Government or Human Evolution/' Vol. II, p. 181. 

2 See "Principles of Sociology," pp. 414-415. 



406 WHAT SOCIALISM IS 

systems ought to furnish an argument in favor of its 
superiority. In the struggle between races of Man, 
those races the institutions of which require most self- 
restraint have invariably overwhelmed those races whose 
institutions require less self-restraint. For example, 
the tribes that lived without any regulation of sexual 
instinct and in which children took the name of their 
mother because the name of their father was not and 
could not be known, disappeared in the conflict with 
tribes which insisted upon some restraint to sexual 
appetite, such as the patriarchal system. Again, the 
patriarchal system which tolerated polygamy has every- 
where been destroyed when it came into conflict with 
monogamous races, such as our own, which involve still 
further restraint in the sexual relation. 

It would seem, therefore, as though the monogamous 
marriage were the keystone of our present civilization, 
for upon it has been built the family, and the education 
and self-restraint which family life involves. 1 There is 
too no function of the family more important than that 
it serves as a model of what the state ought to be as 
distinguished from what the state actually is; that is 
to say, a government which should have equal concern 
for every member of the community, and not one which 
as at present surfeits some and starves others. 

It is the growing idea that a properly constituted state 
must do this for the protection not only of the many, but 
of the few that probably give the most continuous aid 
to Socialism. As Mr. Edwin Bjorkman expressed it: 
"We are beginning to grasp the futility of planning the 
welfare of any one human being apart from the rest of 
his kind. We are coming to think of ourselves, at last, 
as links in a chain so firmly bound together that when the 

1 See "Justice," p. 127, by the author. 



SOLIDARITY 407 

devil grabs the hindmost the wrench is felt by the top- 
most — felt in the very marrow of his bones." * 

And so while the institution of marriage has removed 
an obstacle to solidarity in community life, public health 
has proved its ally. Mr. Bjorkman has made an estimate 
of the enormous cost of unnecessary sickness. But 
the protection of public health is furnishing us a far 
better argument in favor of solidarity and Socialism than 
the mere cost of neglecting it. In Cuba our sanitary 
engineers have practically got rid of yellow fever, not 
only for that community, but for our own. Recent 
discoveries tracing malaria to the mosquito are leading 
to the destruction of this insect. Smallpox and cholera 
have practically been stamped out, and efforts are now 
being made to do the same with typhoid and tuberculosis. 

Now one feature characterizes all these efforts. They 
cannot be made by one man for himself; they have to 
be made by whole communites for whole communities 
and they will eventually have to be made by the whole 
world for the whole world. The same thing is true of 
vagrancy, pauperism, and crime. No individual or group 
of individuals can handle this problem; it must be 
handled by every community, and through the further 
extension of extradition treaties by all countries for the 
whole world. 

Again, reference has been often made in this book to 
the necessity under which governments, openly pro- 
fessing the policy of laissez faire, have found themselves 
to enact laws totally inconsistent with this doctrine. 
Such laws ought to be sufficient evidence that the days 
of laissez faire are gone forever; and that this theory, 
universally proclaimed a century ago as the only sound 
theory of government, has to-day given way before the 

1 The Unnecessary Curse of Sickness, World's Work, July, 1909. 



408 WHAT SOCIALISM IS 

recognition that no wealth can compensate a man for 
the misery of his neighbors; and that even if, abandoning 
all ideals and all ethics, we confine ourselves to the 
problem how to make men materially happy, we can only 
do so by adjusting our institutions so that no man will 
be allowed to become or to remain a pauper or criminal. 

I am not discussing here matters of theory, but matters 
of fact. 

Theoretically, the development of man might have 
taken a totally different direction. The master minds 
of the period (such as that, for example, of Mr. W. H. 
Mallock) might have so organized the able as to con- 
stitute an aristocracy strong enough to keep the rest 
of the community in a state of ignorant servitude, so 
that while Mr. Mallock was enjoying the necessary leisure 
to discuss the "New Republic" amid the luxury of his 
English country home, all the work of the world would 
be accomplished by human automata with no desires 
beyond that of the immediate gratification of their 
appetites. Unfortunately, however, Mr. Mallock has 
come too late upon the scene. Some years before he 
was born, the die was cast. Workingmen were given a 
voice in public affairs and have been educated, so that 
they constitute a power with which government has to 
reckon. Here is a fact against which it is useless for 
millionaires to break their heads. No one can ignore 
the power exercised by such men as Bebel in Germany, 
Jaures and Guesde in France, Vandervelde in Belgium, 
Keir Hardie and MacDonald in England, Gompers and 
John Mitchell in America. These men are all engaged 
in organizing the workingmen's vote with extraordinary 
efficacy in Europe, and with extraordinary inefficacy in 
the United States. But the days of Gompers and Mit- 
chell are drawing to a close, and in this country as well 



SOLIDARITY 409 

as in Europe, Organized Labor will grow to understand 
the inevitable truth that it is only by political action 
and with the Socialist program that it can defeat 
the power of capital. So that whether Mr. Mallock be 
right or not, the day of aristocracy is over and the day 
of solidarity has dawned. The question for us to decide 
is whether we should recognize this fact and modify 
our institutions to conform to the new era, or whether 
we should continue to ignore the fact until we break our 
heads against it. 

The point which Mr. Mallock and his school have 
failed to understand is that the very greed which creates 
aristocracy unfits the aristocrat for the cooperation 
indispensable to its survival. This condemns him, as it 
does all the highest types of canivora, created by the 
competitive system to isolation. For it is out of the 
jealousy and struggles of the aristocrats with one another 
that the people are at last getting to their own. It was 
because the king, the noble, and the church could not 
agree in the division of spoils that their perpetual alter- 
cations left room for the organization of the Communes 
in France at the end of the eleventh century. It was 
because the church, the noble and the king would not 
give a fair share of the honors and spoils of the state to 
the wealthy bourgeoisie, that the bourgeois was obliged 
to associate himself with the people in 1789; it was 
because of the conflict between the Whigs and the Tories 
that the franchise was gradually extended to the work- 
ingmen in England; and it is because the Republicans 
can put no limit to their greed that workingmen in 
America will find themselves eventually compelled to or- 
ganize politically their at present disunited multitudes. 
It is, therefore, extremely improbable that, even if Mr. 
Mallock had lived in an earlier age, he could have pre- 



410 WHAT SOCIALISM IS 

vented the inevitable progress of the great principle of 
solidarity which has determined the direction of human 
development ever since it began to differ from that of 
other animals. 

If now we run through all the differences between the 
natural environment and the environment created by 
Man, we shall see that they practically all proceed upon 
the theory that men must develop no longer as indi- 
viduals but as a unit. All our customs and laws proceed 
upon the theory of liberty and justice; and upon that 
theory is based the original principle of property that 
assures to all men the product of their toil. Now if all 
men are to be assured the product of their toil, there 
must be an end to the system which puts a few million- 
aires at one end of the social scale and millions of paupers 
at the other. 

Again, for centuries the so-called struggle for life has 
ceased to be a struggle for life, but has become a struggle 
for wealth, power, and consideration. It is no longer 
only the fit that survive; the unfit also survive; and if 
the unfit are to survive, we all have a common interest 
in taking the necessary steps to prevent the unfit from 
proving too heavy a burden upon the community. 

Again, all isolating vices such as lust, ferocity, craft, 
fear, and selfishness — vices which characterize the carniv- 
ora and condemn them to lives of isolation — are being 
tempered by the necessities of common life — by the fun- 
damental fact of the solidarity of Man. Thus, lust is 
tempered and in part replaced by love and mercy; ferocity 
is tempered and in part replaced by courage and patience; 
fear is tempered and in part replaced by respect and 
reverence; selfishness is tempered and in part replaced 
by unselfishness. 

And all this advantage which humanity has attained 



SOLIDARITY 411 

over the lower animals is due to its ability to mould its 
own environment, and deliberately undertake the task 
of justice; namely, to " eliminate from our social con- 
ditions the effects of the inequalities of Nature upon the 
happiness and advancement of Man, and particularly 
to create an artificial environment which shall serve the 
individual as well as the race, and tend to perpetuate 
noble types rather than those which are base." 

It is true that so far our efforts to attain justice have 
lamentably failed; but they have failed mainly because 
we have not yet sufficiently limited the scope of com- 
petition. The day we limit competition as suggested in 
the chapter on the Economic Structure of Socialism, 1 
that day we shall have removed the lion from our path. 
And as stated in the Preface, the development of Man 
will then proceed upon the theory that all are perfectible 
and that it is through the improvement of all that every 
individual will attain his best freedom, his best happiness, 
and the fullest opportunities for promoting the happiness 
of all around him. 

This is the ideal to attain which the environment 
described in the Chapter on the Economic Construction 
of the Cooperative Commonwealth has been conceived. 
It is the ideal which furnishes the most economical 
method of production and distribution and, therefore, 
the most leisure and liberty; that creates the environ- 
ment fitted to perpetuate the noble rather than the 
base type; to promote virtue and discourage vice and, 
in a word, creates conditions under which we can prac- 
tise the morality preached by every religion, whether it 
be that of Moses, of Mohammed, or of Christ. 
1 See Book III, Chapter II. 



APPENDIX 



SOCIALIST PARTY NATIONAL PLATFORM 

Adopted at the National Convention Assembled at 

Chicago, May, 1908 

Human life depends upon food, clothing, and shelter. Only 
with these assured are freedom, culture and higher human 
development possible. To produce food, clothing and shelter 
land and machinery are needed. Land alone does not satisfy 
human needs. Human labor creates machinery and applies 
it to the land for the production of raw materials and food 
Whoever has the control of land and machinery controls human 
labor, and with it human life and liberty. 

To-day the machinery and land used for industrial pur- 
poses are owned by a rapidly decreasing minority. So long 
as machinery is simple and easily handled by one man, its 
owner cannot dominate the sources of life of others. But 
when machinery becomes more complex and expensive and 
requires for its effective operation the organized effort of many 
workers, its influence reaches over wide circles of life. The 
owners of such machinery become the dominant class. 

Power Goes with Concentration 

In proportion as the number of such machine owners, 
compared to all other classes, decreases, their power in the 
nation and in the world increases. They bring ever larger 
masses of working people under their control, reducing them 
to the point where muscle and brain are their only productive 

413 



414 APPENDIX 

property. Millions of formerly self-emptying workers thus 
become the helpless wage slaves of the industrial masters. 

As the economic power of the ruling class grows, it becomes 
less useful in the life of the nation. All the useful work of the 
nation falls upon the shoulders of the class whose only property 
is its manual and mental labor power — the wage workers— or 
of the class who have but little land and little effective 
machinery outside of their labor power — the small traders and 
small farmers. The ruling minority is steadily becoming useless 
and parasitic. 

Struggle between Classes 

A bitter struggle over the division of the products of labor 
is waged between the exploiting propertied classes on the 
one hand, and the exploited propertyless class on the other. 
In this struggle the wage-working class cannot expect adequate 
relief from any reform of the present order at the hands of the 
dominant class. 

The wage workers are, therefore, the most determined and 
irreconcilable antagonists of the ruling class. They suffer 
most from the curse of class rule. The fact that a few capi- 
talists are permitted to control all the country's industrial 
resources and social tools for their individual profit, and to 
make the production of the necessaries of life the object of 
competitive private enterprise and speculation, is at the bottom 
of all the social evils of our time. 

Anarchy of Capitalist Production 

In spite of the organization of trusts, pools and combina- 
tions, the capitalists are powerless to regulate production for 
social ends. Industries are largely conducted in a planless 
manner. Through periods of feverish activity the strength 
and health of the workers are mercilessly used up, and during 
periods of enforced idleness the workers are frequently reduced 
to starvation. 

The climaxes of this system of production are the regularly 
recurring industrial depressions and crises which paralyze the 
nation every fifteen or twenty years. 

The capitalist class, in its mad race for profits, is bound to 



APPENDIX 415 

exploit the workers to the very limit of their endurance and 
to sacrifice their physical, moral and mental welfare to its 
own insatiable greed. Capitalism keeps the masses of working- 
men in poverty, destitution, physical exhaustion and ignorance. 
It drags their wives from their homes to the mill and factory. 
It snatches their children from the playgrounds and schools 
and grinds their slender bodies and unformed minds into cold 
dollars. It disfigures, maims, and kills hundreds of thousands 
of workingmen annually in mines, on railroads and in factories. 
It drives millions of workers into the ranks of the unemployed 
and forces large numbers of them into beggary, vagrancy and 
all forms of crime and vice. 

How the Ruling Class Controls 

To maintain their rule over their fellow men, the capitalists 
must keep in their pay all organs of the public powers, public 
mind and public conscience. They control the dominant 
parties and, through them, the elected public officials. They 
select the executives, bribe the legislatures, and corrupt the 
courts of justice. They own and censor the press. They 
dominate the educational institutions. They own the nation 
politically and intellectually just as they own it industrially. 

Socialism Will Free All Classes 

The struggle between wage workers and capitalists grows 
ever fiercer, and has now become the only vital issue before 
the American people. The wage-working class, therefore, has 
the most direct interest in abolishing the capitalist system. 
But in abolishing the present system the workingmen will free 
not only their own class, but also all other classes of modern 
society: the small farmer who is to-day exploited by large 
capital more indirectly but not less effectively than is the wage 
laborer; the small manufacturer and trader, who is engaged 
in a desperate and losing struggle for economic independence 
in the face of the all-conquering power of concentrated capital; 
and even the capitalist himself, who is the slave of his wealth 
rather than its master. The struggle of the working class against 
the capitalist class, while it is a class struggle, is thus at the 
same time a struggle for the abolition of all classes and class 
privileges. 



416 APPENDIX 

Private Ownership the Basis of Class Rule 

The private ownership of the land and means of production 
used for exploitation is the rock upon which class rule is built; 
political government is its indispensable instrument. The 
wage workers cannot be freed from exploitation without con- 
quering the political power and substituting collective for 
private ownership of the land and means of production used 
for exploitation. 

The basis for such transformation is rapidly developing 
within present capitalist society. The factory system, with its 
complex machinery and minute division of labor, is rapidly 
destroying all vestiges of individual production in manufacture. 
Modern production is already very largely a collective and 
social process. The great trusts and monopolies which have 
sprung up in recent years have organized the work and manage- 
ment of the principal industries on a national scale, and have 
fitted them for collective use and operation. 

The Socialist Party is primarily an economic and political 
movement. It is not concerned with matters of religious 
belief. 

Freedom through Solidarity 

In the struggle for freedom the interests of all modern 
workers are identical. The struggle is not only national, but 
international. It embraces the world and will be carried to 
ultimate victory by the united workers of the world. 

To unite the workers of the nation and their allies and 
sympathizers of all other classes to this end, is the mission 
of the Socialist Party. In this battle for freedom the Socialist 
Party does not strive to substitute working-class rule for 
capitalist-class rule, but by working-class victory to free all 
humanity from class rule and to realize the international 
brotherhood of man. 



THE SOCIALIST PLATFORM 

The Socialist Party, in national convention assembled, again 
declares itself as the party of the working class, and appeals 
for the support of all workers of the United States and of all 
citizens who sympathize with the great and just cause of labor. 



APPENDIX 417 

We are at this moment in the midst of one of those industrial 
breakdowns that periodically paralyze the life of the nation. 
The much-boasted era of our national prosperity has been 
followed by one of general misery. Factories, mills and mines 
are closed. Millions of men, ready, willing and able to provide 
the nation with all the necessaries and comforts of life are 
forced into idleness and starvation. Within recent times the 
trusts and monopolies have attained an enormous and menacing 
development. They have acquired the power to dictate the 
terms upon which we shall be allowed to live. The trusts fix 
the prices of our bread, meat and sugar, of our coal, oil and 
clothing, of our raw material and machinery, of all the neces- 
sities of life. 

Capitalism Takes the Offensive 

The present desperate condition of the workers has been 
made the opportunity for a renewed onslaught on organized 
labor. The highest courts of the country have within the 
last year rendered decision after decision depriving the workers 
of rights which they had won by generations of struggle. 

The attempt to destroy the Western Federation of Miners, 
although defeated by the solidarity of organized labor and 
the Socialist movement, revealed the existence of a far-reaching 
and unscrupulous conspiracy by the ruling class against the 
organizations of labor. 

In their efforts to take the lives of the leaders of the miners 
the conspirators violated State laws and the federal constitu- 
tion in a manner seldom equalled even in a country so com- 
pletely dominated by the profit-seeking class as is the United 
States. 

Capitalist Reform Futile 

The Congress of the United States has shown its contempt 
for the interests of labor as plainly and unmistakably as have 
the other branches of government. The laws for which the 
labor organizations have continually petitioned have failed to 
pass. Laws ostensibly enacted for the benefit of labor have 
been distorted against labor. 

The working class of the United States cannot expect any 
remedy for its wrongs from the present ruling class or from 



418 APPENDIX 

the dominant parties. So long as a small number of individuals 
are permitted to control the sources of the nation's wealth for 
their private profit in competition with each other and for 
the exploitation of their fellow men, industrial depressions 
are bound to occur at certain intervals. No currency reforms 
or other legislative measures proposed by capitalist reformers 
can avail against these fatal results of utter anarchy in pro- 
duction. 

Individual competition leads inevitably to combinations 
and trusts. No amount of government regulation, or of pub- 
licity, or of restrictive legislation will arrest the natural course 
of modern industrial development. 

While our courts, legislatures and executive offices remain 
in the hands of the ruling classes and their agents, the govern- 
ment will be used in the interest of these classes as against 
the toilers. 

Old Parties Represent Class Rule 

Political parties are but the expression of economic class 
interests. The Republican, the Democratic, and the so-called 
' Independence ' parties and all parties other than the Socialist 
Party, are financed, directed and controlled by the representa- 
tives of different groups of the ruling class. 

In the maintenance of class government both the Demo- 
cratic and Republican parties have been equally guilty. The 
Republican party has had control of the national government 
and has been directly and actively responsible for these wrongs. 
The Democratic party, while saved from direct responsibility 
by its political impotence, has shown itself equally subservient 
to the aims of the capitalist class whenever and wherever it has 
been in power. The old chattel-slave-owning aristocracy of the 
South, which was the backbone of the Democratic party, has 
been supplanted by a child-slave plutocracy. In the great 
cities of our country the Democratic party is allied with the 
criminal element of the slums as the Republican party is allied 
with the predatory criminals of the palace in maintaining 
the interests of the possessing class. 



APPENDIX 419 

Temporary Measures Demanded 

The various "reform" movements and parties which have 
sprung up within recent years are but the clumsy expression 
of widespread popular discontent. They are not based on an 
intelligent understanding of the historical development of 
civilization and of the economic and political needs of our 
time. They are bound to perish, as the numerous middle-class 
reform movements of the past have perished. 

As measures calculated to strengthen the working class in 
its fight for the realization of this ultimate aim, and to increase 
its power of resistance against capitalist oppression, we advocate 
and pledge ourselves and our elected officers to the following 
program : 

General Demands 

1. The immediate government relief for the unemployed 
workers, by building schools, by reforesting of cut-over and 
waste lands, by reclamation of arid tracts, and the building of 
canals, and by extending all other useful public works. All 
persons employed on such works shall be employed directly 
by the government under an eight-hour workday and at the 
prevailing union wages. The government shall also loan money 
to States and municipalities without interest for the purpose of 
carrying on public works. It shall contribute to the funds 
of labor organizations for the purpose of assisting their un- 
employed members, and shall take such other measures within 
its power as will lessen the widespread misery of the workers 
caused by the misrule of the capitalist class. 

2. The collective ownership of railroads, telegraphs, tele- 
phones, steamship lines and all other means of social trans- 
portation and communication and all land. x 

3. The collective ownership of all industries which are 
organized on a national scale and in which competition has 
virtually ceased to exist. 

4. The extension of the public domain to include mines, 
quarries, oil wells, forests and water power. 

1 By a referendum vote of the entire membership of the Socialist 
party in 1909 these three words, " and all land," were stricken out 
of the Socialist platform. 



420 APPENDIX 

5. That occupancy and use of land be the sole title to 
possession. The scientific reforestation of timber lands and 
the reclamation of swamp lands. The land so reforested or 
reclaimed to be permanently retained as a part of the public 
domain. 

6. The absolute freedom of press, speech and assemblage. 

Industrial Demands 

7. The improvement of the industrial conditions of the 
workers : 

(a) By shortening the workday in keeping with the increased 
productiveness of machinery. 

(b) By securing to every worker a rest period of not less 
than a day and a half in each week. 

(c) By securing a more effective inspection of workshops and 
factories. 

(d) By forbidding the employment of children under sixteen 
years of age. 

(e) By forbidding the interstate transportation of the products 
of child labor, of convict labor and of all uninspected factories. 

(/) By abolishing official charity and substituting in its 
place compulsory insurance against unemployment, illness, 
accidents, invalidism, old age, and death. 

Political Demands 

8. The extension of inheritance taxes, graduated in propor- 
tion to the amount of the bequests and to nearness of kin. 

9. A graduated income tax. 

10. Unrestricted and equal suffrage for men and women, and 
we pledge ourselves to engage in an active campaign in that 
direction. 

11. The initiative and referendum, proportional representa- 
tion and the right of recall. 

12. The abolition of the Senate. 

13. The abolition of the power usurped by the Supreme 
Court of the United States to pass upon the constitutionality 
of legislation enacted by Congress. National laws to be 
repealed or abrogated only by act of Congress or by a refer- 
endum of the whole people. 



APPENDIX 421 

14. That the constitution be made amendable by majority 
vote. 

15. The enactment of further measures for general education 
and for the conservation of health. The Bureau of Education 
to be made a department. The creation of a Department of 
Public Health. 

16. The separation of the present Bureau of Labor from the 
Department of Commerce and Labor, and the establishment of 
a Department of Labor. 

17. That all judges be elected by the people for short terms, 
and that the power to issue injunctions shall be curbed by imme- 
diate legislation. 

18. The free administration of justice. 

Such measures of relief as we may be able to force from 
capitalism are but a preparation of the workers to seize the 
whole powers of government, in order that they may thereby 
lay hold of the whole system of industry, and thus come to 
their rightful inheritance. 

II 

DR. L. EMMETT HOLT 

All who practice medicine among children and who study 
the question of infant mortality statistically are struck with 
the marked contrast between the death rate of the children 
of the poor and those of the rich. Clay estimates that in 
England in the aristocratic families the mortality of the first 
year is 10 per cent; in the middle class, 21 per cent; in the 
laboring classes, 32 per cent. This difference in the infant 
mortality of the various classes is most striking in the case 
of acute intestinal disease. Halle states that of 170 deaths 
from this cause investigated in Graz in 1903 and 1904 there were 
161 among the poor, 9 among the well-to-do, and none among 
the rich. It may not be true in adult life, but in infancy money 
may purchase not only health, it may purchase life, since it puts 
at the disposal of the infant the utmost resources of science, 
the best advice, the best food and the best surroundings for the 
individual child. To relieve, or even greatly to diminish, infant 
mortality these basal conditions of modern city life — poverty 
and ignorance — must be attacked. 

Journal American Medical Association, Feb. 26, 1910. 



422 APPENDIX 



III 



EXTRACTS FROM EDICT OF LOUIS XVI, 1776, 
ABOLISHING THE GUILDS 1 

Louis, etc. We owe it to our subjects to assure them the 
full and complete enjoyment of their rights; we owe that 
protection especially to that class of men who, possessing 
nothing but their labor and industry, above all others have 
the need and right of employing to the limit of their capacity 
their sole resources for subsistence. 

We have viewed with pain the multiplied blows which have 
been struck at this natural and common right of ancient institu- 
tions, blows which neither time, nor opinion, nor even the acts 
emanating from the authority, which seems to have sanctioned 
them, have been able to make legitimate. 

[After describing the vicious effects of the guild monopoly, 
it continues:] 

. . Some persons . . . contend that the right of labor is a 
royal right, one that the Prince could sell and that the subjects 
ought to purchase. We hasten to place beside this another 
maxim : 

God, by giving to men needs and making them dependent 
upon the resources of labor, has made the right of labor the 
property of all men, and that property is primary, the most 
sacred and most imprescriptable of all. 

We regard it as one of the first obligations of our justice, 
and as an act in every way worthy of our beneficence, to eman- 
cipate our subjects from all their restraints which have been 
laid upon that inalienable right of humanity. Wherefore, we 
will to abolish the arbitrary institutions which do not permit 
the indigent to live by their labor; which exclude the sex 
whose weakness implies greatest needs and fewest resources 
. . . which stifle emulation and industry and make useless the 
talents of those whom circumstances exclude from admission 
into the guild; which deprive the state and art of all the advan- 
tages which foreigners might furnish. . . . 

translation taken from "Turgot and the Six Edicts," by R. P. 
Shepherd, 1903, pp. 182, 186-7. 



APPENDIX 423 

IV 

POLICE COMMISSIONER BINGHAM 

Declaring that "law-breaking is the easiest and the most 
lucrative business in New York for the work involved/' Police 
Commissioner Bingham yesterday forwarded his annual report 
to Mayor McClellan. 

After stating that law-breaking in the city is an easy and 
lucrative business, the Commissioner continued: 

"Its profits for slight effort are enormous and law-breaking 
has been able to intrench itself behind such a rampart of 
legislation and highly paid lawyers that the forces of law and 
order are placed in the astonishing position of being actually 
on the defensive against the law-breakers. Law-breakers and 
their highly paid lawyers frequently fool even the courts into 
giving them protection against the police on the grounds of 
illegal interference, or oppression. 

"The howl of innocence is never so loud as when raised by 
crooks, and this includes not only the actual criminals, but 
their friends and protectors, crooked politicians. How other- 
wise is it possible for prizefights to be held in New York city, 
in spite of the earnest efforts of the police to prevent them? 
How otherwise is it possible for places positively known by the 
police to be gambling resorts to be conducted, and to obtain 
injunctions restraining the police from interfering with them? 
"The foregoing is far from saying that the police force of 
New York is incompetent, or not able to cope with the situa- 
tion. The police force is competent, short-handed though it 
is. Its activity and efficiency are proved by the very resistance 
given it by law-breakers, for the better the work done by the 
police, the more stubborn is the resistance they meet with from 
law r -breakers." 

As an example of what the police have to cope with the 
Commissioner mentions the recent Sunday-closing incident, 
where a court decision was handed down and enforced, and 
the Aldermen straightway amended the law. He then asks: 
"How then can the police execute the law, when there seems 
to be so much doubt as to what the law really is?" 
Gen. Bingham continues: 



424 APPENDIX 

" These points are necessary in order that scheming politicians 
may be deprived of any possibility of summarily getting rid 
of an honest commissioner and in order that the honest men 
of the police force may be encouraged. The men of the force 
to-day are not quite sure who is their real boss — the 'machine' 
or the police commissioner. If once satisfied that it is the 
commissioner, with a long term and only removable on publi- 
cation of charges, they will obey him." 

Legislation requiring persons who sell any sort of dangerous 
weapons to record the date and hour of the sale, and report it, 
with the name and address of the buyer, to the police, is 
suggested, as well as a daily report from pawnbrokers, giving 
the date, hour, and other particulars of their transactions. 
This, the Commissioner says, is the custom in other large cities. 

The following figures of arrests, etc., in the last year are given 
in the report: 

Arrests Made 

By uniformed force 192,680 

Detective Bureau 11,416 

Total 204,096 

These figures refer to the Boroughs of Manhattan, The Bronx, 
and Richmond. N. Y. Times, Jan. 5, 1908. 



PETTIBONE v. NICHOLS 

Dissenting opinion of Mr. Justice McKenna : 

I am constrained to dissent from the opinion and judgment 
of the court. The principle announced, as I understand it, 
is that "a Circuit Court of the United States, when asked upon 
habeas corpus to discharge a person held in actual custody by 
a State for trial in one of its courts under an indictment charg- 
ing a crime against its laws, cannot properly take into account 
the methods whereby the State obtained such custody." In 
other words, and to illuminate the principle by the light of the 
facts in this case (facts, I mean, as alleged, and which we must 



APPENDIX 425 

assume to be true for the purpose of our discussion), that the 
officers of one State may falsely represent that a person was 
personally present in the State and committed a crime there, 
and had fled from its justice, may arrest such person and take 
him from another State, the officers of the latter knowing of 
false accusation and conniving in and aiding its purpose, thereby 
depriving him of an opportunity to appeal to the courts, and 
that such person cannot invoke the rights guaranteed to him 
by the Constitution and statutes of the United States in the 
State to which he is taken. And this, it is said, is supported 
by the cases of Ker v. Illinois, 119 U. S. 436, and Mahon v. 
Justice, 127 U. S. 700. These cases, extreme as they are, do 
not justify, in my judgment, the conclusion deduced from them. 
In neither case was the State the actor in the wrongs that 
brought within its confines the accused person. In the case 
at bar, the States, through their officers, are the offenders. 
They, by an illegal exertion of power, deprived the accused 
of a constitutional right. The distinction is important to be 
observed. It finds expression in Mahon v. Justice. But it 
does not need emphasizing. Kidnapping is a crime, pure and 
simple. It is difficult to accomplish; hazardous at every step. 
All of the officers of the law are supposed to be on guard against 
it. All of the officers of the law may be invoked against it. 
But how is it w T hen the law becomes the kidnapper, when the 
officers of the law^, using its forms and exerting its power, 
become abductors? This is not a distinction without a differ- 
ence — another form of the crime of kidnapping, distinguished 
only from that committed by an individual by circumstances. 
If a State may say to one within her borders and upon whom 
her process is served, I will not inquire how you came here; 
I must execute my laws and remit you to proceedings against 
those who have wronged you, may she so plead against her 
own offences? May she claim that by mere physical presence 
within her borders, an accused person is within her jurisdiction 
denuded of his constitutional rights, though he has been 
brought there by her violence? And constitutional rights the 
accused in this case certainly did have, and valuable ones. 
The foundation of extradition between the States is that the 
accused should be a fugitive from justice from the demanding 
State, and he may challenge the fact by habeas corpus imme- 
diately upon his arrest. If he refute the fact he cannot be 



426 APPENDIX 

removed. Hyatt v. Corkran, 188 U. S. 691. And the right to 
resist removal is not a right of asylum. To call it so in the 
State where the accused is is misleading. It is the right to be 
free from molestation. It is the right of personal liberty in its 
most complete sense. And this right was vindicated in Hyatt 
v. Corkran, and the fiction of a constructive presence in a State 
and a constructive flight from a constructive presence rejected. 
This decision illustrates at once the value of the right and the 
value of the means to enforce the right. It is to be hoped that 
our criminal jurisprudence will not need for its efficient adminis- 
tration the destruction of either the right or the means to 
enforce it. The decision in the case at bar, as I view it, brings 
us perilously near both results. Is this exaggeration? What 
are the facts in the case at bar as alleged in the petition, and 
which it is conceded must be assumed to be true? The com- 
plaint, which was the foundation of the extradition proceed- 
ings, charged against the accused the crime of murder on the 
thirtieth of December, 1905, at Caldwell, in the county of 
Canyon, State of Idaho, by killing one Frank Steunenberg, by 
throwing an explosive bomb at and against his person. The 
accused avers in his petition that he had not been "in the State 
of Idaho, in any way, shape or form, for a period of more than 
ten years " prior to the acts of which he complained, and that 
the Governor of Idaho knew accused had not been in the State 
the day the murder was committed, "nor at any time near 
that day/' A conspiracy is alleged between the Governor of 
the State of Idaho and his advisers, and that the Governor of 
the State of Colorado took part in the conspiracy, the purpose 
of which was "to avoid the Constitution of the United States 
and the act of Congress made in pursuance thereof, and to 
prevent the accused from asserting his constitutional right 
under cl. 2, sec. 2, of art. IV, of the Constitution of the United 
States and the act made pursuant thereof." The manner in 
which the alleged conspiracy had been executed was set out in 
detail. It was in effect that the agent of the State of Idaho 
arrived in Denver, Thursday, February 15, 1906, but it was 
agreed between him and the officers of Colorado that the arrest 
of the accused should not be made until some time in the 
night of Saturday, after business hours — after the courts had 
closed and judges and lawyers had departed to their homes; 
that the arrest should be kept a secret and the body of the 



APPENDIX 427 

accused should be clandestinely hurried out of the State of 

Colorado with all possible speed, without the knowledge of his 

friends or his counsel; that he was at the usual place of business 

during Thursday, Friday, and Saturday, but no attempt was 

made to arrest him until 11.30 o'clock p.m. Saturday, when 

his house was surrounded and he was arrested. Moyer was 

arrested under the same circumstances at 8.45, and he 

and accused " thrown into the county jail of the city and 

county of Denver." It is further alleged that, in pursuance 

of the conspiracy, between the hours of five and six 

o'clock on Sunday morning, February 18, the officers of the 

State and " certain armed guards, being a part of the forces 

of the militia of the State of Colorado," provided a special 

train for the purpose of forcibly removing him from the State 

of Colorado, and between said hours he was forcibly placed on 

said train and removed with all possible speed to the State of 

Idaho; that prior to his removal and at all times after his 

incarceration in the jail at Denver he requested to be allowed 

to communicate with his friends and his counsel and his family, 

and the privilege was absolutely denied him. The train, it is 

alleged, made no stop at any considerable station, but proceeded 

at great and unusual speed; and that he was accompanied by 

and surrounded with armed guards, members of the State 

militia of Colorado, under the orders and directions of the 

adjutant general of the State. 

I submit that the facts in this case are different in kind and 
transcend in consequences those in the cases of Ker v. Illinois 
and Mahon v. Justice, and differ from and transcend them as 
the power of a State transcends the power of an individual. 
No individual or individuals could have accomplished what the 
the power of the two States accomplished; no individual or 
individuals could have commanded the means and success; 
could have made two arrests of prominent citizens by invading 
their homes; could have commanded the resources of jails, 
armed guards and special trains; could have successfully timed 
all acts to prevent inquiry and judicial interference. 

The accused, as soon as he could have done so, submitted 
his rights to the consideration of the courts. He could not 
have done so in Colorado, he could not have done so on the 
way from Colorado. At the first instant that the State of 
Idaho relaxed its restraining power he invoked the aid of 



428 APPENDIX 

habeas corpus successively of the Supreme Court of the State 
and of the Circuit Court of the United States. He should not 
have been dismissed from the court, and the action of the 
Circuit Court in so doing should be reversed. 



VI 

EUGENE V. DEBS 

"Yes," said Debs. "The trusts are wiping out the com- 
petitive system. They are a stage in the process of evolution: 
the individual; the firm; the corporation; the trust; and 
so, finally, the commonwealth. By killing competition and 
training men to work together, trusts are preparing for the 
cooperative stage of industry: Socialism." 

"Then you would keep the trusts we have and welcome 
others? " I asked. 

"Of course," he answered, and Berger nodded approval. 

"They do harm now," I suggested. 

"Yes," said Debs, but Berger boomed: "No; not the trusts. 
Private owners of the trusts do harm, yes; but not the trusts." 

"Well, but how would you deal with the harm?" 

"Remove 'em/' snapped Berger, and Debs explained: "We 
would have the government take the trusts and remove the 
men who own or control them: the Morgans and Rockefellers, 
who exploit; and the stockholders who draw unearned divi- 
dends from them." 

"Would you pay for or just take them?" 

Berger seemed to have anticipated this question. He was on 
his feet, and he uttered a warning for Debs — in vain. 

"Take them," Debs answered. 

"No," cried Berger, and, running around to Debs, he stood 
menacingly over him. "No, you wouldn't," he declared. 
"Not if I was there. And you shall not say it for the party. 
It is my party as much as it is your party, and I answer that we 
would offer to pay." 

It was a tense but an illuminating moment. The difference 
is typical and temperamental; and not only as between these 
two opposite individualities, but among Socialists generally. 
Debs, the revolutionist, argued gently that, since the system 
under which private monopolies had grown up was unjust, there 



APPENDIX 429 

should be no compromise with it. Berger, the evolutionist 
replied angrily that it was not alone a matter of justice, but of 
"tactic"; and that tactics were settled by authority' of the 
party. 

"We (Socialists) are the inheritors of a civilization " he pro- 
claimed, "and all that is good in it-art, music, institutions, 
buildings, public works, character, the sense of right and wrong 
—not one of these shall be lost. And violence, like that, would 
lose us much." Berger cited the Civil War: "All men can see 
now that it was coming years before 1861. Some tried to avert 
it then by proposing to pay for the slaves. The fanatics on 
both sides refused. We all know the result: slavery was 
abolished. But how? Instead of a peaceful evolution and an 
outlay of, say, a billion, it was abolished by a war which cost 
us nearly ten billion dollars and a million lives. We ought to 
learn from history, so I say we will offer compensation; because 
it seems just to present-day thought and will prove the easiest 
cheapest way in the end. And anyhow," he concluded, "and 
besites, the party, it has decited that we shall offer to pay " 

From the article by Mr. Steffens, Eugene V. Debs, in Every- 
body's Magazine, Oct., 1908. 

VII 

TRAMPS AND VAGRANTS 

Tramps, professional and amateur, and trespassers of both 
sexes and all ages, are simply swarming over the railroads east 
of the Mississippi River, forming a very serious problem for 
both railroads and State Governments, according to reports 
which 0. F. Lewis has received from most of the great roads 
of the East, and recently published in Charities and The Com- 
mons. Mr. Lewis finds from these reports that the railroad 
tramp and trespasser evil is on the increase, with roads and 
btates through which they pass unable to check it, and one 
road, the New York Central, declares that half of the loss and 
damage claims currently paid by railroads may be ascribed 
to robberies committed by tramps and trespassers. Much of 
this increase in trampdom is ascribed to the effects of the 
panic and the hard times, which threw thousands of men out 
of employment. 



430 APPENDIX 

"Most of the railroads/' says Mr. Lewis, in summing up the 
replies received to the questions he sent out, "report a very 
noticeable increase in vagrancy on their lines. The Central 
Vermont says 75 per cent, the Chicago & Eastern Illinois 50 
per cent, the Great Northern 200 per cent. Great increases are 
reported by the Delaware, Lackawanna & Western, the New 
York Central, Pennsylvania, Philadelphia & Reading, and 
many others. The Northern Pacific reports more vagrants 
travelling than ever before. 

"A decrease is reported on the Central of New Jersey, the 
Cumberland Valley, Chicago, Indiana & Southern, and on the 
Missouri Pacific. Emphasizing the increase on the Pennsylva- 
nia, President McCrea states that four times as many arrests 
were made for illegal train riding in June, 1908, as in June, 
1907. 

"Stealing foodstuffs, stealing rides, stealing handcars, 
threatening and injuring trainmen, placing obstructions on 
tracks, stoning freight crews, setting air brakes, and robbing 
ticket offices, are typical offences/' 

As bearing on the question of, literally, "Who pays the 
freight?" the following is from the New York Central's report: 

"We are required by law to charge all of the costs arising 
out of the operation of the railroad to operating expenses, 
which constitute the loss of the services rendered. Among 
these expenses are loss and damage due to the effects of tres- 
passing and the acts of trespassers. Inasmuch as the definition 
of a reasonable rate has been stated to include the cost of the 
service and a reasonable return upon the value of the property 
employed, it inevitably follows that our charge to the public 
includes these elements of cost. It may, therefore, be said 
that in the end the public pays, but we would prefer to eliminate 
this source of cost as far as practicable." 

Many railroads ascribe the increased number of vagrants to 
"hard times," resulting in the reduction in the number of men 
employed throughout the country. 

The report is frequent that more "honest out-of-works" are 
stealing rides and trespassing. President McCrea reports that 
"not many of the illegal train riders are vagrants, but men 
out of employment." The Southern Pacific reports that "the 
type of trespasser is as a whole better." y 

With striking frequency the railroads report the majority 



APPENDIX 431 

of illegal train riders to be young men and boys. The ages 
"18 to 25 " are often mentioned. The Central Railroad of New 
Jersey says they can be considered as the coming generation of 
tramps. 

Answering the question, "Do you believe in a State con- 
stabulary to cooperate with the railway police in prosecuting 
vagrants?" twenty-three railroads replied "yes," five replied 
"no," and sixteen either had not considered the matter thor- 
oughly or made no reply. The State constabulary is favored 
mainly by trunk lines that are troubled by vagrants. 

N. Y. Times, Feb. 14, 1909. 

VIII 
PUBLIC STORE NOTES 

The last report of the Director of the Mint (as quoted in 
Statistical Abstract of the United States, 1908, p. 714) gives the 
stock of gold in the United States as nearly $1,600,000,000 and 
amount of silver as almost $700,000,000— in all, $2,300,000,000. 
Of course, all this coin will never be at the disposal of the 
State ; some of it will remain as now in private hands. But all 
the coin now held by the Government as reserves to secure 
greenbacks issued will be gradually released by the substitution 
of store notes for greenbacks. This substitution cannot be 
honestly effected except in proportion to the amount of produce 
which goes into the public stores. There are at the present 
moment a little over $1,000,000,000 of greenbacks issued by the 
United States Government redeemable in coin. If in any 
given year the produce acquired by the state amounts to — 
say, $100,000,000, the state can withdraw greenbacks to the 
amount of $100,000,000 and substitute therefor public store 
notes for $100,000,000, and so on, until there have been sub- 
stituted public store notes for all the greenbacks in circulation. 

As regards the remaining $1,300,000,000, some of this, of 
course, will remain in private hands; and if it were the policy 
of the government to increase its supply of gold for the pur- 
chase of foreign goods, it could levy taxes paid by those engaged 
in private industry in gold instead of in produce. If, on the 
other hand, the private banking system operated satisfactorily, 
the state could leave the whole of $1,300,000,000 in the hands 



432 APPENDIX 

of private bankers and through its ownership of mines, would 
still have the whole gold and silver production in the United 
States for the purchase of foreign goods. 

As the amount of gold and silver produced in the United 
States amounted in 1907 to over $90,000,000 of gold and over 
137 000,000 of silver, it will be seen that the state would have 
at its disposal some $127,000,000 in gold and silver which it 
could use in the purchase of foreign goods against which it 
could issue public store notes. In other words, gold and silver 
will be confined to the amount used in the competitive system 
and that required for the settlement of foreign exchanges. 



INDEX 



Accidents, 165, 166, 326, 420 
adulteration, 66, 88-93 
advertising, cost of, 5, 95, 207- 

208, 233 
Africa, 121, 309, 391 
Agriculture, 29, 218 

Year Book of the Department 
of, 230 
Albany, 261, 265 
alcoholism, 272 
America, 16, 137, 140 

business men in, 58 

land in, 127 

municipal ownership in, 20 

prosperity of, 24 

Republic of, 138 

Socialism in, 149 

sweating in, 156 

trade unionism in, 149 

workingmen in, 409 
American — 

— cities, 286 

— export of wheat, 55 

— Farmer, 48 

— Federation of Labor, 171 

— Medical Association, 421 

— nationality, 118, 284 

— Smelting and Refining 
Company, 87, 170 

— Socialist press, 40 

— Steel District, 164 

— Steel and Wire Company, 
62 

— Sugar Refining Company, 
106 



American — 

— view of Socialism, 1 

— workingmen's families, 229 
Anarchism, 7, 31, 33-34, 43, 51, 

127, 174 
anarchists, 21, 31-34 

Communistic, 33 
anarchy, 108, 110, 300 

— of distribution, 99, 102-110 

— of production, 102-110, 
414-418 

— of the Middle Ages, 107 
apprenticeship, 150 

— rules, 151 
Archbold, 99 

art, 31, 45, 128, 328, 429 
adulteration an, 88, 93 

Asia, 105 

Astor, John Jacob, 117 
William Waldorf, 118, 123 

B 

Babbage, Economy of Manufac- 
ture, 219 

Bankers, Institute of, 193 

Barral, Dictionnaire d' Agricul- 
ture, 268 

Bebel, August, 408 

Belgian view of Socialism, 1 

Belgium, 392 

cooperative stores in, 200 
farm colonies in, 78 
universal franchise in, 242 

Bell, Alexander Graham, 221 

Bellamy, Edward, 405 

Berger. Victor 255-256 

433 



434 



INDEX 



Berger, Victor, views on com- 
pensation, 428-429 

Berne, Canton of, 263 

Beveridge, W. H., 66, 71-73, 
75-76, 78 

Bingham, Theodore, Police Com- 
missioner of New York city, 
158, 423, 424 

Birmingham, 285 

— converted its slum into 
Corporation Street, 283 

municipal ownership of gas 

in, 20 
Bismarck, 241 
Bjorkman, Edwin, 406-407 
Boer War, 309 
Booth, Charles, 356 
Boston, Chamber of Commerce 

of, 60, 218 

— Milk Contractors' Associa- 
tion, 288 

bourgeois, 4, 11, 23, 25-26, 29, 
32, 37, 39, 44, 46, 58, 66, 
111 

— needs concrete statement, 4 
characterization of, 11 

— controls schools, colleges, 
and press, 24, 42-43, 68 

Bradley, Edson, 206 
British — 

— Empire, 63 

— employers, 148 

— government, 171 

— opium war in China, 63 

— Parliament, 142 

— trade unionists, 148 
Brookmire, James H., 182, 191 
Bryan, Wm. J., 6, 42, 57, 132 
Bureau of Labor, 5, 227-228, 

230, 293, 421 
business men slaves of their own 
creations, 49 



California, 280 
Canal, 419 



Canal, Panama, 220 

Suez, 220 
Cannon, Joseph, 309 
capital, 58-61, 102-105, 109, 

132, 144, 165, 167, 172, 226, 

409 

— by Karl Marx, 1, 34 
fluidity of, 64-65, 103 
waste of, 99 

capitalist, 4, 10-11, 33, 36, 60, 
102, 107, 109, 200, 219, 
308, 414-415 

— class, 418 

— society, 414 
Carlyle, Thomas, 388, 402 
Carnegie, Andrew, 148, 199, 201, 

325 
Problems of the Day, by, 199 
Carnegie Steel Company, 168 
Carter, James C, 7 
Census (U. S.), 41, 48, 73, 77, 

204 
Central Railroad of Vermont, 

430 

— of New Jersey, 430 
Chamber of Commerce (Boston) , 

60, 218 
Chapin, Robert Coit, 229 
Charities, 164, 229 

— and the Commons, 266, 429 
Commissioner of, 266 

charity, 72, 77, 78, 420 
Chicago, 209-210, 413, 430 
children, 34-35, 65, 68, 109, 
117, 120, 143, 154, 321, 
325, 328, 415, 421 

death rate of, 38 

exploitation of, 42 

employment of, 42, 154, 157- 
158, 420 

property in, 133 
China, 63 
Chinese, 64, 354 
cholera, 18, 19, 143 
Christian Socialism, 12 
Christian Socialist, 40, 207 



INDEX 



435 



churches, 328-330 
circulating medium, 307-313 
citizens, 25, 42, 218, 320, 327 
citizens' union, 322-324 
City Club, 90, 323 
civil war, 168, 175, 429 
civilization, 31, 85, 88, 113, 119, 
126, 134, 138, 140-141 

property the basis of every 
conceivable, 43 

unemployment a peculiar 
product of our, 68 
Clare, George, 193 
class, 118, 144, 152, 416, 422 

bourgeois, 24, 26, 137 

capitalist, 143 

criminal, 322 

— consciousness, 16 
dominant, 412 
exploited, 26 

— interest, 29, 418 
laboring, 33, 109 
propertied, 24, 68, 120, 122, 

414 

— rule, 45, 416 
ruling, 414-418 

— struggle, 25, 414 
wage-earning, 147, 415 

Clearing House, 177 

— Association, 183 
coal, 417 

— trust, 164, 238 
Collectivism and Revolution, 1 
colleges, controlled by prop- 
ertied class, 68 

colony, farm, 263-277, 380 

agricultural, 273 

penal, 274, 276 
Colorado, 426-427 

— Midland railroad, 210 

— miners' strike, 168 

— State Board of Health, 90 
Columbia University, 92 
combination, 96, 99, 104, 143, 

149-150, 160, 163-164, 319, 
414, 419 



commerce, 329 

— chamber of, 60, 218 
Commerce and Labor, U. S. 

Department of, 421 
Commercial Travelers' National 
League, 208 

— crises, 178, 414 
Commonwealth, 5, 10, 30-31, 

36, 80, 137, 143, 145, 
252, 256, 300, 305, 317, 
325-329, 426 
Communism, 33, 36, 51, 302 

— of Apostolic times, 34 
Socialism is not, 7 

Communist, 7, 302 

Sir Thomas More a, 33 

community, 25, 29, 116, 123, 
131, 144, 147, 218, 319, 
323, 326, 329, 410 

compensation, 19-20, 29, 123, 
251-253, 255-256, 285, 429 

competition, 7, 9, 18-19, 34-38, 
51,58,61,63,71,94,99-103, 
106-107, 151-152, 155, 157, 
158, 262, 409, 419 
foreign, 149 

— primary cause of unem- 
ployment, 66-67 

competitive system, 8, 37-39, 
51, 53, 56-57, 60-66, 72-74, 
79, 82, 86, 88, 99, 101-102, 
105, 110, 134, 140-142, 144- 
147, 153, 160, 323, 426, 432 

Comptroller of the City of New 
York, 190 

compulsory education, 3, 120 

Conant, Charles A., 177, 179 

conflict, 115, 121, 140, 144 

— between captial and labor, 
5,86 

— between economics and 
religion, 389 

— between races, 115 

— between science and re- 
ligion, 378-395 

— between tribes, 133 



436 



INDEX 



conflict between trusts and trade 
unions, 176 
international, 354 
congested districts, 19, 42, 283 
Congress (U. S.) 168, 197, 308- 
309, 318, 329-332, 417, 
420, 426 
Constitution, 329, 365, 417, 421 
federal, 15 

— of the United States, 365, 
425-426 

State, 15 

Constructive Program of Social- 
ism, 7 

consumer, 92-93, 96-97, 105- 
107 

Consumers' parliament, 330 

contract, freedom of, 94, 107, 
109-110, 144 

cooperation, 9, 34-35, 50-51, 
54, 58, 94, 102, 104, 108, 
199-201, 409 

cooperative system, 39, 51, 128, 
342-347 

— stores in Belgium, 200 
corporations, 72, 320-321, 323- 

324, 426 
Cortelyou, George, 187-189 
cost, 62, 87, 155 

— of advertising, 5, 95 

— of crime, 5 

— of crude oil, 63 

— of distribution, 5 

— of getting the market, 99 

— of letter distribution, 96 

— of living, 156, 228-229 

— of revolutions, 30 
cotton, 55, 92, 155 

— industries of Lancashire, 
153 

proposal to burn, 60 

— weavers of India, 218 
country, 29, 35, 43, 65, 77, 112, 

118, 120, 121, 131-132, 156, 
330, 417 
County Council (London), 320 



courts, 15, 92, 110, 119, 155, 

415-428 
credit, 178 
crime, 9, 22, 26, 35, 39, 42, 44, 

52, 63, 66, 83, 99, 128, 130, 

158, 415, 424-426 
crises, 178, 414 
cross freights, 96, 99-100 
Cuba, 407 
Cumberland, 430 
custom, 13, 112, 113, 366 
cyclical fluctuations, 67, 73 

D 

Dairy and Food Commission of 
Ohio, 90 

— products, 275 
Damien, Father, 39 
Darwin, Charles, 8, 85 
Dearies, N. B., 72 
death, 37-38, 99, 136, 212, 421 
Debs, Eugene V., 255, 428-429 
Declaration of Independence, 137 
defectives and delinquents, 5 
degeneracy, 36 
Delaware, 430 

democracy, 28, 129, 143, 158, .175 
Denver, 210, 426^27 
depression, 66, 76, 87, 414 

industrial, 73, 153, 418 
Detrich, J., 281 
disease, 39, 54, 58, 69-70, 99 
distribution, 23, 28-29, 36-37, 
54-55, 59, 66, 87, 93-94, 97 

anarchy of, 99, 102 

cost of, 5, 10, 288, 318, 411 
divorce, 40, 81 
Dowe, President Commercial 

Travelers' League, 95 
drunkenness, 70, 79, 99 
Dutch farm colonies, 271 

E 

economic conditions, 23-30, 64, 
322, 329 
points of view created by, 22 



INDEX 



437 



economic interpretation of his- 
tory, 10 

— liberty, 51-52 

— socialism, 1, 13, 14 

— tyranny, 138 
Economists, 61, 66, 73, 103, 403 

orthodox, 68 
economy, 48, 50 

— of Manufacture, 219 

— of Socialism, 5 
education, 144, 154, 158, 325- 

328 
Board of, 321 

— of workingmen, 48, 144 
U. S. Department of, 27, 421 

Elimination of the Tramp, 264, 
271-272 

Eliot, Charles W., 109 

Ely, Richard T., 42, 60, 209, 210, 
217, 225 

employers — 

loss to, from strikes, 86 

Employers' Association in Colo- 
rado, 168 

Encyclopedia Americana, 88,148 

— Britannica, 93 
Engels, Friedrich, 1, 387 
engineer's lockout, 148-149 
England, 40, 63, 78, 132, 147- 

148, 176, 193, 210, 220, 236- 
237, 264, 309, 409, 421 
Labor party in, 171 
municipal ownership in, 20 
Public House Trust in, 295 
English — 

manufacturers, 63 
ministry, 154 

— Poor Law Guardians, 273 

— Socialism of To-day, 155 

— unions, 171 

Ensor, R. C. K., Modern Social- 
ism, 387 

Ethical argument for Socialism, 
12, 13, 29 

— Aspect of Socialism, 378- 
410 



Ethical standards, 81 

Europe, 76, 105, 132, 135-136, 
166, 173, 181, 188, 196, 210, 
223, 263, 289, 309, 408-409 

Evolution, 3, 5 

— and Effort, 267 

— and Ethics, 336, 379-385 
Socialist, 22, 

evolutionist, 23-24, 27-30, 429 
exploitation, 4, 35, 45, 416 

— of women and children, 32 
export of wheat, 55 

— of oil, 63, 104 



Fabian Tracts, 2 

factory, 29, 32, 48, 80, 103-104, 

123-124, 132,138, 156,220, 

327, 415-417 

— hand 16, 25, 47, 50, 73 
independent, 159 

— inspection, 420 

— owners, 25, -29, 47-48, 69- 
70 

fallacies regarding Socialism, 6 
family, 28, 35, 42, 44, 109, 118, 
122, 131, 134, 137, 153, 157, 
421, 427 
Faraday, 222 
farm, 29 

colony, 78-80, 263-277 - - 
deserted, 68 

— hands, 28 
ownership of, 16 

farmer, 15, 28-29, 48, 55, 177- 

178, 415 
Farmers' Bulletin, 269, 281 
farming population, 48 ; 
Federal Steel Company, 62 
Federation of Labor, 171 
Fesca, Dr. M., Beitrage zur 
Kenntniss der japanesischen 
Landwirthschaft, 267 
Fields, Factories and Work- 
shops (Kropotkin), 267 
Filene Store, 199-200 



438 



INDEX 



financial crises, 178, 299 

fines (for adulteration), 88-93 

food, 98 

— adulteration, 89-93 
Food and Drugs Act, 91 
forests, 27 

Forster, Rt. Hon. H. O. Arnold, 

154 
Fourier, 317 
France, 40, 78, 132, 137, 243, 

264, 266, 308-309, 318, 

392, 409 
franchise, 135, 145 
free trade, 69 

freedom, 109, 116, 121, 124 
law an abridgment of, 113-114 

— of contract, 11, 140-141 

— of industry, 111 
ecomonic, 50, 125 

French Parliament, 18-19 

— peasant, 278 

— penal code, 142 

— Revolution, 32, 138, 140, 
243 

Frick, Henry, 27, 188, 191 
funds, 172, 

benefit, 136 

Mansion House Relief, 76 

savings bank, 78 

trade union, 78 

G 

Galvani, 222 

gambling, 38, 68, 72, 423 

gardeners (Paris), 268 

— Hammersmith, 18-20 
Gary, Elbert H., 57-62, 188, 

191 
gas, 123, 324 

— in Birmingham, 20 

— in Manchester, 20 

— in New York, 21 
General Electric Company, 184, 

221 
Genevilliers, 268 
George, Henry, 123, 36* 



German (the), 321 

— competition, 148 
Germany, 236, 242, 308-309, 408 

cabinet minister in, 132 
palliative measures in, 78 
workingmen in, 16 
Ghent, W. J., 89 
Giddings, Professor Franklin H., 

405 
Gladstone, 334, 384 
Gompers, Samuel, 408 
Gothenburg system, 295 
government, 32-33, 43, 102, 121, 
128-129, 135-136, 150, 218, 
315, 317-320, 336, 416-418, 
431 

— control, 12, 72 
good, 321-324 

— postoffice, 97 

— printing office, 228 
publications of U. S., 12, 228 
the Prussian, 25 

Grandeau, L«, Etudes agrono- 

miques, 268 
Guesde, Jules, 408 
Guggenheim, Senator, 74 

Daniel, 87 
guilds, 135, 140 

tyranny of, 135-140 

H 

Hague Tribunal, 355 

Hallet, Major, 267 

Hammersmith, 18-20 

Hardie, Keir, 408 

Harriman, 304 

Havemeyer, H. O., 57, 105, 107. 
159, 161 

Haywood, 169, 240 

health, 414, 421 

Colorado State Board of, 90 
conservation of, 27, 38, 72 
Department of, 27 

Hebberd, Mr., Commissioner of 
Charities of New York city, 
266 



INDEX 



439 



Henri IV, 142 

Hill, James J., 238, 304 

Hillquit, Morris, 2, 7, 248, 305, 

307 
Hindustan, 64, 355 
history, 28, 387 
Holland, 222 

farm colonies in, 262, 265 
Hollesley Bay, 78 
Holt, Dr. L. Emmett, 38, 421 
home, 7, 40-42, 51, 83, 105, 156, 

157, 415 
common, 317 

— Economics, Conference on, 
92 

— industry, 138 
horde, 34, 35, 107 

hours of labor, 62, 69, 128, 145, 
152, 153, 220, 318, 326, 328, 
419 

excessive, 70 

four hours' workday, 50 

— of farmer, 15 
House of Commons, 18 
House report, 52d Congress, 2d 

session, 197 
Hudson river, 261 
Hughes, Charles F., 244-245 
Hunter, Robert, 42 
Huxley, Thomas, 13, 315-316, 

379-380, 382-386, 388, 395, 

404 



Ice Trust, 262 
Idaho, 426-427 
Illinois, 425, 427, 430 
immediate demands, 26, 27, 246 
immobilization of capital, 65 
imprisonment for adulteration, 

89-93 
India, 218 

starvation in, 55, 60 

tiger developed in, 4 
Indian opium forced upon China, 
63 



Indiana, 430 
individualism, 10, 23, 32 
Industrial Commission, 57, 62- 

63, 76, 95, 99, 104-107, 146, 

150-151, 159, 161-164, 170, 

206-208, 288 
industrial conditions, 42, 64, 

76, 93 

— depression, 153, 414 

— Parliament, 318 

— population, 48 

— schools, 151 

— system, 26, 46, 52, 73 
industrialism, 88 

industries, 118, 318, 326-327 
414, 416 
captain of, 87 

collective ownership of, 419 
seasonal, 71 
socialized, 319 
industry, 65, 102-105, 107, 123, 
134, 138-140, 148, 155, 
159, 317, 421-422 
insurance, 5, 78, 179, 303, 420 
German national, 241 

— Year Book, 179 
International, the, 155 

— complications, 63 

— conflict, 354 

— crime, 63 
interest, 59, 69 

personal, 29-30 

private, 26 

vested, 15, 17, 19, 20, 22-30 
intranational conflict, 354 
invention, 44, 219, 222-224 
inventor, 219, 220-224 
investor, 94 
Ireland, 241 
Italy, 22, 267 



James I of England, 21 
Japan, 62-63, 239, 267 
Jaures, 132, 408 



440 



INDEX 



Jersey, Island of, 280 
justice, 27, 34, 64, 411-429 

K 

Kautzky, Karl, 239, 243, SOT- 
SOS 

Kentucky, 60 

Knickerbocker Trust Company, 
182-184, 189, 191 

Kropotkin, 34, 135, 267-268 



labor, 36, 50-51, 75, 80, 86, 104, 
113-114, 116-117, 119, 123, 
131, 135, 144, 147, 154, 157, 
414-422 

— Bulletin, 120 
Bureau of, 421 
child, 109 

Commerce and, 421 
Department of, 421 
fluidity of, 103 

— market, 109 

— members of Parliament, 
173 

— not so fluid as capital, 64 

— of women, 109 
young, 69 

laborers, 72, 74 

Laissez-faire, 11, 32, 139, 407 

Lancashire, 154 

land, 15, 24, 27, 29, 42, 48, 59, 
112, 116, 118, 122-124, 
148, 269, 317, 412-414, 
416, 420 

law, 43, 91-92, 108, 112-113, 
119, 121, 126, 137, 159, 
322, 324, 410, 417, 420, 423, 
425, 430 

— of 1799 of British Parlia- 
ment, 142 

relation of custom to, 13 
Lebovitz, J., 5 
legislation, 26, 424 
leisure, 48-49, 52, 65, 125-130, 
325, 411 



Lesseps de, 220 

Lewis, Orlando F., 429-430 

liberty, 7, 32, 46-47, 50, 52, 

110, 130, 139, 317,325,409, 

412, 426 
A Plea for, 50, 94 
life, 28, 33, 37-38, 50, 67-72 
Lincoln, 175 

lockout, 5, 86-88, 110, 148 
London, 18, 21, 71, 219, 284, 

286, 320, 394 
Louis XIV, 137, 422 
Lowell, James Russell, 223 
lumber, 53 

camps, 42 
lunacy, 49, 278 
Lyell, Sir Charles, 349 

M 

McCrea, President, 430 
MacDonald, J. Ramsay, 408 
McKenna, Judge, 169, 424 
machine, political, 129 
machinery, 69, 218, 414-420 
Maine, 280 
Mallock, 408-409 
Malthus, 172, 316 
Manchester, 20 

— school, 32, 60, 139 
Manhattan, 97-98, 282, 424 
Mansion House Relief Fund, 76 
Manufacture, Economy of, 219 
market, 16, 18, 64, 93, 103-105, 

109-110, 141, 146, 148, 15-s 
foreign, 62, 63, 76, 319 
getting the, 95-96 

— price, 154, 159 
the London, 18 
tyranny of the, 102-103 

marriage, 40, 85, 134, 351-. X : 

358-359 
Marshall, Alfred, 391 
Martineau, Harriet, 402 
Marx, Karl, 1, 8, 25, 33-34, 147, 

155-156, 226, 386 



INDEX 



441 



Marxian school, 25, 201, 239 

— doctrine of value, 33 

— socialism, 1 

— socialist, 242 
Mass and Class, 89 
Maxim, 220 
meat, 137, 417 

— distribution, 97 

— Trust, 262 
Metropolitan Life Insurance 

Company, 212 
Metz, Hermann, Comptroller of 

New York city, 190 
Middle Ages, 107, 110, 135, 138 
militia, 27, 427 
milk, 96-97, 324 

— adulteration, 90 

— Contractors' Association, 
288 

trust, 211 
Mill, John Stuart, 32, 325 
Miner, Maud E., probation offi- 
cer, 83 
mineowners^ 27 
miners, 65 131, 415, 417 

— union, 164 

Western Federation of, 417 
misrepresentation, 6, 15-16 
Mississippi, 429 
Mitchell, Dr. W. C, 90-91 
Mitchell, John, 146, 151-152, 

408 
Modern Socialism, R. C. K. 

Ensor, 387 
Monde Economique, 63 
Monetary and Banking system, 

by Maurice L. Muhleman, 

181 
money, 37, 53-55, 66-68, 77-79, 

81, 86, 176-198, 323, 419 

— market, 74 

— Market Primer, by George 
Clare, 193 

monopoly, 260, 416, 422, 428 

— of guilds, 256 
monopolies, 123, 137, 146, 150 



morality, 40, 45, 81-84 
More, Sir Thomas, 33 
Morgan, J. Pierpont, 169, 185, 
195-196, 237-239, 254, 257, 
428 
elimination of waste by, 58 
organization of steel and coal 

trusts by, 238 
share of, in New York city 
finances, Oct., 1908, 190 
Morris, William, 2 
mortality, 38 
infant, 419 
Moyer, 169 

Muhleman, Maurice L., 181 
municipalities, 74 
municipal ownership, 20-21 
Municipal Year Book, 20 

N 

nation, 63. 65, 105, 107, 114, 

131, 133, 412-418 
National Association of State 

Food and Dairy Depart- 
ments, 91 
National Executive Committee, 

248, 256 
necessaries of life, 128, 417 
Negro slavery, 46 
New England, 42 
New York Central railroad, 74, 

429-430 
New York city, 19-22, 177, 179, 

190, 209, 214, 283-284, 

320-322 
Aldermen in, 247 
butcher shops in, 97 
reform in, 128 
Trow's directory of, 97 
New York State, 245, 265, 269, 

272 
— Department of Labor, 73,74 
Newton, Isaac, 219, 222 
Nightingale, Florence, 39 
Northern Pacific, 191, 430 
Northern Securities Case, 238 



442 



INDEX 



O 

occupations, 71-72 75, 114- 
115, 278 

Oersted, 222 

Ohio Dairy and Food Depart- 
ment, 90 

Ohm, 219, 222 

oil, 63, 94, 96, 105, 417 
Pratts' Astral, 207 
Standard, 99, 104, 207 

opium, 63-64 

— war in China, 63 
organization, 115, 147-148, 

157 
industrial, 107 
international, 156 

— of labor, 127, 145 

— of trade unions, 159 
political, 122, 128 

Organized Labor, by John Mit- 
chell, 73-75, 115, 145-146, 
151-153, 409, 417 
Outlook the, 6, 40, 82, 109, 259 
overinvestment, 65-66 
overproduction, 57-66, 218 
overwork, 48, 69-70, 72, 122, 

164 
ownership, 20-21, 416 
collective, 419 

— of land, 24, 121, 280 
State, 317 

State, not Socialism, 25 



pacemakers, 69 
Palissy, Bernard, 223 
palliative measures, 78 
Panama bonds, 188 

— canal, 220 
Pangborn, Col., 266 
panic, 63, 65, 73-75, 87, 181- 

194, 299 
Paris, 7, 18, 98, 137, 138, 286 
Parliament, 173 

Industrial, 319 



parlor Socialists, 28 
Parnell, 241 
party, 416-419 
capitalistic, 16 
Democratic, 122, 134, 308 
dominant, 415 
Labor, in England, 171 
Republican, 122, 134, 309, 418 
Socialist, 2, 21, 26-27, 34-36, 
45, 134, 200, 248, 414, 418, 
428-429 
pauper, 80 
pauperism, 9, 22, 26, 35-36 44, 

52, 66, 99, 128, 130 
penal colonies, 274 
Pennsylvania, 74-75, 91, 280, 

430 
Pettibone vs. Collins, 424 
Philadelphia, 430 
philanthropists, 87 
philosophy of Socialism, 6, 54 
Pinkerton, Robert A., 168 
pipeline, 63, 105 
Pittsburg, 15, 164-165, 167, 173, 
201 
Survey, 164, 167, 173-174, 
201 
platform, Socialist, 6, 26-27, 45, 

134, 413, 421 
Plato, 33, 44, 388 
Platonic school of Socialism, 199 
Plea for Liberty, 50, 94 
political — 

— action, 26, 110, 409 

— contributions, 32 

— control, 135 

— issue, 140 

— liberty, 47, 52, 121 

— parties, 140 

— power, 26-27 

— Science Quarterly, 169 

— students, 23 
politics, 48, 110, 129 
Ponce, La Culture Maraiche, 

268 
Poor Law guardians, 273 



INDEX 



443 



popular government, 107, 142 
population, 65, 131, 134, 142, 

153, 156-158, 323 
Populism, 174 

Portland Proceedings, 90-91 
postoffice, 262 

— economies, 96-97 
Poverty, by Robert Hunter, 42 
press, 66, 415, 420 

propertied class in control of, 

42-43 

price, 42, 50, 58-63, 65-66, 69. 

76, 87, 94, 98, 103-104 10q\ 

134-135, 147-148, 158-160, 

228, 324, 417 

Principles of Sociology, 335-405 

Problems of the Day, by Andrew 

Carnegie, 199 
problems, solution of, 151 

economic, 128 
Problems of Unemplovment, 72 
production, 12, 23, 25, 28, 33 
35-38, 45, 49, 52-54, 59 
66, 86, 93-94 104, 110, 
123, 131-132, 139 
anarchy of, 318, 413, 414, 416, 
418 
products, 33, 36, 46, 51, 55, 99, 
105. 113, 116-117,119 121, 
123-124, 126, 128, 135, 137, 
139, 314-319 
profit, 5, 10, 16, 25, 37, 58-60, 
65 94, 102, 104-106, 108, 
148, 155, 414, 423 
proletariat, 25-26, 45, 119, 122 
property, 7, 15-16 24-25, 28- 
29, 32-33, 42-46, 112, 131- 
175, 414, 422 
— and Liberty, 54, 112-130 
prostitution, 4, 9, 26, 35-36, 44, 
66, 79, 86, 88, 99, 128, 130 
Proudhon, 7, 33-34, 124, 131 
Prussia, 317 

Prussian Government, 25 
public domain, 27 
Public House Trust, 295 



public ownership, 20-21, 27, 106 
Pullman, 168 

Q 

de Quesnay, 54 

Quintessence of Socialism, 235 

R 

race, 32, 65-66, 91, 115, 128,327, 
411 
for profits, 415 
rags sold as woollen cloth, 93 

— pickers of Paris, 18-20 
railroads, 53, 65, 73-95, 123, 

131, 215, 303, 329, 415, 

419, 429-431 
reclamation, 27, 101 
reforestation, 27 
reform, 26-28, 71, 127, 129, 

243, 414, 418-419 
relief, 26, 76 
remedies, 31, 78 
remuneration, 303-306 
republic, 243 
revolution, 25-28, 243 
revolutionary period, 108 

— Socialists, 27, 29 
revolutionist, 23-26, 30, 228 
Rhode Island, 306 

Ritchie, Professor, 385 
Rockefeller, 57-58, 104, 159, 

237-239, 253-255, 288, 325 
Rocky mountains, 96, 276 
Rodbertus, 307 
Rogers, Tharold, 233 
Roosevelt, Theodore, 6, 25, 33- 

34, 40-42, 50, 82, 132, 134, 

237-239, 255, 259-260, 

320, 398 
Rousseau, 138 
royalty, 21 

Ruskin, John, 402-403 
Russia, 121, 239 

S 

salaries, 82, 303-306 
San Francisco, 96 



444 



INDEX 



savings Banks, 42, 65, 78 
Schaffle, 235 
Schenectady, 261 
school, 153, 165, 321, 326, 328, 
409, 415, 419 
divinity, 329 
industrial, 151 
Manchester, 20, 32, 60, 139 
Marxian, 25 
trade, 151 
Science, 1, 88, 115, 128, 421 

- - and Morals, 336 
Scientific aspect of Socialism, 

335-377 
Seligman, J. & W., 196 
semirskilled workers, 75 
Semler, Tropische Agrikultur,267 
Shaw, Bernard, 2 
sickness, 5, 136, 153, 172, 326, 

406-407 
Simon, A. M., The American 

Farmer, 48 
Simon Eugene, La Cite" Chinoise, 

267 
single tax, 123, 278, 285 
slave, 15, 45, 47, 49, 51, 104, 

115, 125, 140, 415, 429 
slaveowner, 69 
slavery, 15, 109, 120, 125, 127, 

128-130 
Smith, Adam, 32, 54, 139 
Social Revolution (Kautzky) , 239 
Socialism and Social Reform, 

42, 60, 209, 211, 217-218 
Socialism in Theory and Prac- 
tice, 248, 305, 307-308 
socialization of industries, 34 
South, farmers of the, 217 
South Australia, 290 
South Carolina, 267 
Southern Pacific, 430 
Spargo, John, 2, 248-250 
Spencer, Herbert, 3, 13, 32, 54, 
94, 101, 137, 336, 365, 388, 
404 
standard of living, 165, 229 



standard of wages, 157 
Standard Oil, 99, 104-105, 152, 

159, 207, 251, 253-256 
starvation, 103, 120, 139, 156, 

158, 414, 417 
State, 45-46, 80, 91, 134, 325, 

409, 424-431 
agricultural, 77 

— commissions, 89 

— constabulary, 431 

— Government, 329 

— laws, 417 
mining, 77 

New York, 75, 280 

— ownership not Socialism, 25 
Prussian, 25 

— Socialism, 235, 317-318 

— Socialist, 27 

— viands, 50 

Statistical Abstract of the 
United States, 148, 181, 431 
statistics, 5, 38, 73 
steel, 94, 327-328 

— industry, 148 
— - rails, 63 

— trust, 55, 149, 164, 185- 
186, 201, 238, 257, 303 

U. S.,— Corporation, 185 
Steffens, Lincoln, 255, 429 
step by step socialist, 28 
stockholders, 21, 252, 324 
stocks, 85, 160 
store, 11, 29, 82, 156, 431 
strike, 62, 71, 86-88, 145, 148, 

168 
struggle, 147, 153, 415 

class, 25 

— for Existence in Human 
Society, 336 

— for life, 337,410 
study of Sociology, 365 
Suez canal, 220 

sugar trust, 61, 95 
Survey, 164, 167, 173-174, 201 
swamplands, 27, 101, 180, 420 
sweated trades, 158 



INDEX 



445 



sweating system, 154. 156 
Switzerland, 263, 266. 272 

farm colonies in. 78, 269 
system, 28, 34, 44. 409, 421 

apprenticeship, 151 

— of production, 35, 414 

capitalist, 45 

competitive, 37. 39. 54, 66, 86, 
98, 99, 145. 323, 325 

cooperative, 12S 

factory, 416 

Fourier's, 317 



Taft, President, 1, 6, 42, 132 
raxes. 323, 326, 420 

personal, 118 

single, 123 

— rate, 320 
teachers, 49 

— college, 92 
tenements, 19, 41, 247, 321 
Tennessee Coal and Iron Com- 
pany. 185-186, 188, 191 

textiles, 92 

— schools, 92 
Thompson, Carl D., 7 
tobacco, 156 

adulteration of, 91 

— crop in Kentucky, 60 
Tolstoi, 3S8 

Toubeau, La repartition me- 

trique des impots. 267 
trade, 63, 88, 92. 93, 95 

export, 105-10G, 111, 137, 

145, 149, 151-155, 321, 

328 
trade unions, 16, 72-77, 86, 

110, 136, 140-159, 167-174 
organization of, 159-160 
tramps, 24. 264, 271-272, 273- 

274, 430 
Troy, 261 

vrust companies, 182 
Trust Company of America, 185 



trusts, 15, 16. 76, 86. 104, 
107, 110, 140, 142, 159, 
175, 418 

expropriation of, 15 

development of, 58 

Standard Oil. 99 

steel, 149, 303 
Turgot, 422 
Tweed. 320 
Tyranny, 142 

economic, 138 

— of the guilds, 138 

— of the market, 102-104, 
107, 109 

— of the trade union, 108- 
110 

— of the trusts, 104, 109 



U 



underconsumption, 66, 67 
underemployment, 66, 67, 72 
underpayment, 67, 72 
unemployable, 70-72, 78, 87 
unemployed, 24, 42, 66-79, 

103, 107, 148, 157, 245, 415 
unemployment, 4, 39. 60, 65, 

79, 81, 86, 88-89, 140, 144, 

153, 164, 245 
unions, 108, 159-160, 169-175 
United States, 7, 61, 64, 144, 

147. 151, 177, 179, 187-188, 

193, 204, 206, 209, 215, 266, 

272, 416-417 

— Bureau of Labor, 228, 293 

— Census, 41, 48, 73, 77, 204 

— Congress, 16S, 197, 30S-309, 
318, 329-330, 417, 420, 426 

— Constitution, 15, 365, 417, 
426 

— Department of Agriculture, 
230 

— Department of Labor, 148, 
230~ 

divorce in. 40-41 

— postofhce, 96-97, 262 



446 



INDEX 



United States, Secretary of the 
Treasury of, 187, 189 
statistical abstract of, 148, 

181, 431 
statutes of, 424-425 
— Treasury, 181, 187-188 
unorganized labor, 73, 75, 77, 

109, 145 
unskilled labor, 75-77 



value, 125-126 

Marx' theory of, 33 

surplus, 10 
Vandervelde, Emil, 1, 7, 408 
Vermont, 430 

vested interests, 15, 18-22, 30 
vice, 40, 362, 410-411, 415 
Vienna, 286 
violence, 27, 67, 117-118, 124, 

168-169, 425, 429 
Volta, 222 

W 

wages, 69-70, 103-104, 109, 
118, 124, 142, 145, 147, 151- 
158, 165 

miners', 82-83 

— earners', 16 

— servants', 122 

— slave, 68 

— slavery, 68-69 
union, 419 

Wall Street, 179-192, 212 
war, 168, 175, 429 
Ward, Lester F., 404 
Washington, 5, 260, 309 
Waste, 96, 102, 139, 301 

— lands, 419 

— of capital, 99 



waste of life and property in 

revolution, 28 
water, 20, 21, 101, 123, 419 
wealth, 42-43, 45-46, 50, 52, 

65, 67, 115, 117, 130-131, 

134-135, 137, 410, 415, 

418 
Webb, Sidney, 2 
Western Federation of Miners, 

417 
Western Union, 210 
Westinghouse Company, 184, 

187, 221 
wheat, 55, 293 
whiskey, adulteration of, 91 

Trust, 61, 161-162 
Why Socialism is Impossible, 

235 
Winslow, Lanier & Company, 

196 
Wisconsin, 256 
women, 35, 46, 65, 68, 80- 

86, 120, 142-143, 154, 

157-158, 165, 245, 265, 

275 
exploitation of, 32 
suffrage for, 420 
Woodbridge, Alice, 82 
working class, 42-45, 414^16, 

419 
workingmen, 15, 47-48, 51, 62, 

64, 68, 70, 75, 77, 86, 103, 

108, 109, 116, 137-138, 142, 

144, 149, 151-154 
standard of living of, 229 



Year book of the Department of 
Agriculture, 230 

Insurance, 179 

Municipal, 20 
Yorkshire, 154 



3477-3 



